India-Now-Vol-2-Issue-01-APRIL-MAY-2011.pdf - IBEF

RURAL UPDATE ENGINEER CONNECTS RURAL ARTISANS TO CORPORATE BUYERS

INNOVATION CORNERMACHINE DRAMATICALLY SPEEDS UP PROCESSING OF BAMBOO

EMERGING ENTREPRENEURENGINEERS TO THE RESCUE OF TRANSFORMER MANUFACTURERS

April-May 2011 | Volume 02 | Issue 1 B U S I N E S S A N D E C O N O M Y

The airwaves are the new highway on which the economy is rapidly advancing, adding more than 17 million mobile phone subscribers each month.

IndiaConnected

1www.ibef.org APRIL-MAY 2011

EDITORIALwww.ibef.org

VOLUME 01 | ISSUE 03 | AUGUST-SEPTEMBER 2010

Hemant Kumar

www.ibef.org

VOLUME 02 | ISSUE 01 | APRIL-MAY 2011

The great Indian success story is a tribute to the inno-vativeness and the spirit of enterprise of every Indian. Imagine a vegetable vendor pull out his mobile phone and take down his customer’s shopping list, or a rick-shaw puller pause in mid-cycling and fix his next ride’s

pick up location—anytime, anywhere. In the last decade, mobile phones have done more to change the way Indians do business, than many things put together. The cell phone revolution has lit-erally placed the world in the palm of the user’s hand. Informa-tion is available at the veritable click of a button and people are harnessing the enormous power of this mammoth tool at their disposal. Telecommunications has done for India what roads and bridges did for the Western world. Indians are now not just connected, they are truly empowered.

It is not just telecommunications. The Charkha, or spindle, has spun its own story of revolution in India. The khadi industry not only supports millions of traditional workers, it is also a grand business success story, as we will see in Made In India.

Another revolution has been the runaway success of Maruti Suzuki India Ltd, a company that began manufacturing cars three decades ago in India. The spirit of innovation has also inspired a unique pen-sion scheme for economically weaker sections of the society.

The world’s attention is focussed on India as its economy gath-ers steam in the renewed energy of post-recession recovery. A lot will be achieved through good old fashioned hard work and attention to detail, but a large part of it will also ride on the air-waves, as a billion plus Indians connect and do business.

Indians are ready to take their place on the world stage.

Charged and Connected Mobile phones build bridges of opportunity across the Indian landscape

India Now—Business and Economy is a bi-monthly magazine published and printed by India Brand Equity Foundation (IBEF), Gurgaon. It is published at 249- F, Sector-18, Udyog Vihar, Phase- IV, Gurgaon – 122015, Haryana and printed at Silver Point Press Pvt Ltd., A-403, TTC Ind. Area, Near Anthony Motors, Mahape, Navi Mumbai-400701, District Thane. The magazine is edited by Anuradha Das Mathur, Nine Dot Nine Mediaworx Pvt Ltd., B-118 Sector 2 Noida – 201301, Uttar Pradesh.

India Now—Business and Economy is for private circulation only. Material in this publication may not be reproduced in any form without the written permission of IBEF.

Editorial opinions expressed in the magazine are not necessarily those of IBEF and IBEF does not take responsibility for the advertising content, content obtained from third parties and views expressed by any independent author/contributor. (India Brand Equity Foundation, c/o Confederation of Indian Industry, 249-F, Sector 18, Udyog Vihar Phase IV, Gurgaon 122 015, Haryana, India; Tel: 91-124-4014060-67; Fax: 91-124-4013873/75; Email:[email protected]).

Opinions expressed herein are of the authors and do not necessarily reflect any opinion of Nine Dot Nine Mediaworx Pvt Ltd., B-118 Sector 2 Noida – 201301, Uttar Pradesh, India; Tel: 91-120-4010-999; Fax: 91-120-4010-911; Email: [email protected]

EDITORIAL

Editor: Anuradha Das Mathur

Consulting Editor: Hemant Kumar

Managing Editor: Mahesh Ravi

Copy Editor: Rohini Banerjee

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Sr. Creative Director: Jayan K Narayanan

Art Director: Binesh Sreedharan

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CONTENTS

12

COPYRIGHT Published & printed by India Brand Equity Foundation (IBEF), 249- F, Sector-18, Udyog Vihar, Phase- IV, Gurgaon–122015, Haryana. India Now–Business and Economy is for private circulation only. Material in this publication may not be reproduced in any form without the written permission of IBEF.

Please Recycle This Magazine And Remove Inserts Before

Recycling

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VOLUME 02 | ISSUE 01

APR I L- M AY 2 011CONTENTS

COVER STORY

14 | India Connected Adding more than 17 million subscribers every month, the mobile phone revolution has changed the way Indians do business, and live life.

MNC WATCH10 | RIDING THE WINDS: MARUTI SUZUKI INDIA LTDThe auto giant leaves com-petition miles behind with relentless quality control and proven performance.

ARTS & CULTURE42 | NATIONAL SCHOOL OF DRAMA:MAKING STARSThe premier school has an in-depth curriculum and rigorous training schedules for aspiring professionals.

14

2 APRIL-MAY 2011 www.ibef.org

48 48 48

20

36

22 | Monitoring MachinesBright young engineers help transformer manufacturers solve a problem that has given them sleepless nights for years.

EMERGING ENTREPRENEURS

SECTORAL UPDATE

37 | HOMESPUN SUCCESSThe Khadi and Village Industries Commission is India’s own industrial giant with the mind of an industry and the heart of a missionary.

MADE IN INDIA

40 | WOOD WORTHYoung innovator from the North East develops affordable machine that processes bamboo at 25 times the speed of manual processing.

INNOVATION CORNER

REGULARS

01 | EDITORIAL04 | NATIONAL ROUND-UP25 | MICROFINANCE44 | TOURISM UPDATE46 | RURAL UPDATE47 | BOOKSHELF

26 | MEDIA & ENTERTAINMENT:SIGNALLING SUC-CESS The sector has scripted its success story.

29 | CONSTRUCTION:EQUIPPING INDIA As the economy grows, the industry is poised for major expansion.

32 | ENGINEERING:STRONG CURRENTS The progressive sector gains from being at the forefront of nation-building.

35 | AGRO-FOOD:SAVOURING SUCCESS Positive developments in the sector cook up a success story many will want to savour.

48 48 48

22

40



National

ROUND-UP

VOICE OF A VISIONARY

A theory must be tempered

with reality Jawaharlal Nehru

Share of developing nations in world manu-facturing output

India is one of top 10 manufacturing nationsINDUSTRY India has emerged as one of the top ten manufacturers of the world in 2010, driven mainly by its strong economic growth, the United Nations Industrial Development Organi-zation (UNIDO) has said.

According to UNIDO's ‘International Yearbook of Industrial Statistics 2011,' released in Vienna recent-ly, India showed strong economic growth in 2010. The manufacturing value added (MVA) of India, Brazil and China grew by over 10 per cent, it said.

“Thanks to the high growth rates achieved by developing countries, their share in world

manufacturing output has reached 32 per cent compared to 20 per cent 10 years ago,” UNIDO said in a statement.

India tops developing countries (China excluded) in the production of textiles, chemical products, basic metals, general machinery and equipment, and electrical machinery. “India has overtaken Brazil in the production of motor vehicles and now ranks second among developing coun-tries after Mexico,” the authoritative UNIDO statement added.

32%DATA BRIEFING

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NAT I O NAL RO U N D - U PNAT I O NAL RO U N D - U P


Germany, UK, France and the Netherlands signed a Memorandum of Understanding earlier this year with the Indian Council of Social Science Research to fund research centres in India and Europe to address social science challenges, including economic growth, energy and climate change and health and well-being.

UPDATE ON RESEARCH STUDIES

SAIL to invest US$ 12 billion in four overseas plants

STEEL The Steel Authority of India (SAIL) will build four steel plants overseas at an investment of US$ 12 billion, according to its chairman, C S Verma.

The public sector steel giant is also looking for a strategic investor for its proposed plants in Indonesia, Oman, Mongolia and South Africa, which will produce three million tonnes of steel each, Verma told reporters recently. "Funding will be met through 70-80 per cent of debt and the rest through equity," he said. "We are talking to the governments of the coun-tries where we plan to set up the steel plants. It will take about three years to start the plants from the day we sign the memorandum of understand-ing with each government," Verma added.

SAIL is part of the International Coal Ventures Ltd (ICVL) consortium which has bid for a Mongolian coal mine and is looking to buy overseas coal assets in countries such as Australia, Indonesia and the United States. Other companies in the group are the power generation public sector unit National Thermal Power Corporation (NTPC), iron ore miner National Mining Development Coorporation (NMDC), Coal India Ltd and the Rashtriya Ispat Nigam Ltd.

THEY SAID IT

DR D SUBBARAO

Dr D Subbarao, Governor of the Reserve Bank of India (RBI), while addressing the annual Spring Meeting of the International Monetary Fund (IMF) in Washington DC, USA, on April 17.

"Global rebalancing will require deficit economies to save more and consume less, while depending more on external demand relative to domestic demand for sustaining growth"

NAT I O NAL RO U N D - U P


World Bank backs India's growth storyGDP The World Bank says

that the Indian economy looks set to regain its pre-crisis growth rate of nearly 9 per cent in 2010-11 and 2011-12. This is in line with the estimates of the high-power Prime Minister’s Economic Advisory Council (PMEAC), which said recently that the economy would expand by 8.6 this year and 9 per cent in 2011-12.

In its India Economic Update released early in April, the World Bank said that strong GDP growth and consistent quarterly results indicate that “economic recovery is robust... Looking forward, GDP growth looks set to regain the pre-crisis

trend of around 8.5 to 9 per cent in this year and the next.” In the first six months of this fiscal, the economy rose by 8.9 per cent, the bank said.

The PMEAC’s positive outlook is based largely on an estimated record wheat output this year. In its

"Review of the Economy 2010-11" report, the Council said that since there is a healthy growth in investment and savings rates, the economy should grow at 9 per cent.

C. Rangara-jan, PMEAC

chairman, said agriculture is set to grow at 5.4 per cent in 2010-11. "We might have a record harvest of wheat."

Agriculture holds the key, Rangarajan said. To sustain a 9 per cent growth rate, controlling inflation would be critical, and there has to be increased focus on infra-structure creation, he added.

Early in April, the Asian Development Bank (ADB) had also forecast that the Indian economy would remain robust over the next two years.

The bank's flagship annual economic publica-tion, Asian Development Outlook 2011, said the economy would grow at 8.8 per cent next year as invest-ment and overall economic activity pick up and planned reforms move forward.

The bank said improved agricultural output, strong private consumption, robust investment, and a pickup in exports supported growth in 2010-11.

The Asian Develop-ment Bank also says the Indian econ-omy will re-main robust over the next two years

“We are on a fiscal consolida-

tion path. We don’t want to occupy more space in public borrowing...”– Sushma Nath, Finance Secretary

“Emerging markets have realised signifi-cant and sustained growth for our ac-tive pharmaceutical ingredients...”Kiran Mazumdar Shaw

Chairman, Biocon

“In the next 5 years,

we target organic growth of 15-20% and inorganic growth of 10%”–Adi Godrej, Chairman,

Godrej Group

“We’re developing a four-

wheeler, born out of the skill of a motor-cycle/ three-wheeler company”–Rajiv Bajaj, MD, Bajaj Auto

on Bajaj's much-awaited small car

SOUND BITES

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UPDATES

TRADE Surging past the govern-ment’s own target, India exported goods and services worth nearly US$ 246 billion in 2010-11. Anand Sharma, Minister of Commerce and Industry, said the engineering goods sector’s spectacular growth of 85 per cent took the overall export growth to 37.5 per cent in the financial year. The government had set itself the target of reach-ing US$ 200 billion in 2010-11, he said.Briefing reporters on the export perfor-mance, the minister said: “Exports have indeed exceeded our expectations. This is the first time exports have crossed US$ 200 billion mark.” The government has now set itself an ambitious target of almost dou-bling export earnings to US$ 450

billion by 2014, the minister said. “... we are confident we will achieve the target of exports of US$ 450 billion which we have set for our-selves in the draft strategy paper,” he added. Released earlier this year, the paper is a comprehensive offi-cial document that charts the route

map to achieving the target by 2014.According to an official release, engineering goods exports exceeded US$ 60 billion, while exports of petroleum products grew 50 per cent to more than US$ 42 billion. The gems and jewellery and drugs and pharmaceuticals sectors both showed

growth of a little more than 15 per cent. Iron ore exports grew by near-ly 25 per cent, notching up US$ 4.5 billion, according to the release.

Exports cross US$ 245 billion

COMMERCEUPDATE

AUTOMOBILES The Indian

automobile industry post-

ed a growth of more than

26 per cent in vehicle sales

during 2010-11. The Soci-

ety of Indian Automobile

Manufacturers (SIAM) says

this is mainly the result of

than 155 million vehicles

this year, compared with

a little less than 123 million

the year before, said SIAM.

“We have ended the

year on a reasonably high

note, reaching a very strong

base after consistent good

growth in the last six quar-

ters,” Pawan Goenka,

President of SIAM, told

reporters recently.

He said good GDP

growth, higher spending

INVESTMENT Easing the

rules for foreign direct invest-

ment (FDI), the government

has allowed overseas com-

panies to hold equity in India

against imported capital

goods and machinery.

In a statement recently,

the government said it

would permit the issue of

equity, under the govern-

ment route, in the import of

capital goods, machinery

and equipment (including

second-hand machinery).

This will allow conversion of

non-cash items into equity.

The government has also

rationalised the guidelines for

downstream investments.

Now there are only two cate-

gories of companies—those

owned by Indian residents,

and companies owned by

foreign investors.

The norms for pricing con-

vertible instruments have

also changed. Companies’

evaluation will now be tied to

their performance, and in line

with the pricing guidelines of

the Securities and Exchange

Board of India (SEBI).

In agriculture, FDI will now

be permitted in the devel-

opment and production of

seeds and planting mate-

rial, without the stipulation of

having to do so under ‘con-

trolled conditions’.

on infrastructure develop-

ment, strong consumer

confidence and the govern-

ment’s focus on rural areas,

contributed to the growth.

Sixteen new models of

passenger vehicles and

24 two-wheelers last year,

worked well for the automo-

bile industry, said Goenka.

Market leader Maruti

Suzuki’s sales in the last fis-

cal jumped by more than 26

per cent, just short of a mil-

lion vehicles. Its rival Hyun-

dai Motor’s sales increased

by almost 14 per cent as it

sold nearly 3,59,000 vehi-

cles, SIAM added.

Auto industry grows 26% in 2011; Can be world's 6th largest next year

85 %GROWTH OF

ENGINEERING

GOODS EXPORTS.

IRON ORE EXPORTS

JUMP 25 PER CENT.

robust economic growth

and the rural thrust.

It said the Indian industry

is expected to overtake Bra-

zil to become the sixth larg-

est automobile market in the

world during this fiscal.

Manufacturers sold more

INDUSTRY TRACKER

Govt eases FDI norms for foreign firms

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INDIA

WATCH Area Population Male Female Population Density Urban Population 3,287,590 sq km 1.189 billion 617.03 million 572.13 million 382 per sq km 356.75 million

Experts have revised their real GDP growth rate forecasts upwards to 8.7 per cent in 2010-11, from 8.5 per cent in the last survey. The higher forecast is driven mainly by growth in agriculture and services. For 2011-12, the real GDP growth rate is expected to be 8.5 per cent, driven mainly by services. For the fiscal 2010-11, forecasters have assigned the probability of 60.7 per cent to a GDP growth range of 8.5 to 8.9 per cent. For 2011-12, the

Mean Probability Pattern of Real GDP Growth Forecasts

2011-12

2010-11

Sour

ce: R

BI S

urve

y of

Pro

fess

iona

l For

ecas

ters

India's exports in 2010-11

$ 245.9 bn

60%

50%

40%

30%

20%

10%

07 to

7.4 %7.5 to 7.9 %

8 to 8.4 %

8.5 to 8.9 %

9 to 9.4 %

9.5 to 9.9%

Chart 1: Year-on-Year Growth in IIP Chart 2: Year-on-Year Growth in Sectoral Indices

Sour

ce: C

SO

Mining Manufacturing Electricity

Key performance indicators of the Indian economy, with patterns, trends and forecasts

India’s Economic Outlook

Fiscal Year 2007-08 2008-09 2009-10 2010-11

GDP Growth 9.40% 7.30% 5.40% 8.50%

CPI 6.40% 9.30% 5.50% 14.44%

Source: RBI

experts have assigned the value of 38.3 per cent to the probability that GDP will grow in the range of 8 to 8.4 per cent.

Sour

ce: C

SO

Apr-0

8Au

g-08

Dec-

08Ap

r-09

Aug-

09De

c-09

Apr-1

0Au

g-10

Dec-

10

20%

16%

12%

8%

4%

0%

-4%

20%

16%

12%

8%

4%

0%

-4%

Apr-0

8

Aug-

08De

c-08

Apr-0

9

Aug-

09De

c-09

Apr-1

0

Aug-

10

Dec-

10

I N D IA WATCH


Date BSE Sensex % Change S&P CNX NIFTY %Change

3.01.11 20,561.05 3.58 6,157.60 3.3

1.02.11 18,022.22 -12.35 5,417.20 -12.02

1.03.11 18,446.50 2.35 5,522.30 1.94

1.04.11 19,420.39 5.28 5,826.05 5.50

Date INR/USD INR/GBP INR/JPY INR/EUR

Nov 2010 44.95 71.29 55.1 61.72

Dec 2010 44.7 69.77 55.11 59.9

Jan 2011 45.93 73.65 56.04 62.98

Feb 2011 45.65 73.61 56.02 62.98

Mar 2011 45.04 73.46 55.01 62.22

Sour

ce: R

BISo

urce

: RBI

Stock Market

Currency Exchange Rate

Sour

ce: R

BI

Monthly trends in Wholesale Price Index- monthly average (% change) Key Macroeconomic Indicators

Sour

ce:

RB

I

Cash Reserve Ratio

Apr

il-20

10

May

-201

0

June

-201

0

July

-201

0

Aug

-201

0

Sep

-201

0

Oct

-201

0

Nov

-201

0

Dec

-201

0

Jan-

2011

Feb-

2011

Mar

ch-2

011

Sour

ce: R

BI, F

igur

es a

re in

mill

ions

Chart 4: FDI & FII Inflows

FII

FDI

5.95%

6%

6.05%

5.9%

5.85%

5.8%5.75%

5.7%

5.65%

5.6%

Manufactured Goods

Fuel Power Light & Lubricants

Primary articles

All Commodities

4

2

0

-2

-4

-8 2009 2010

6

Source: RBI

Repo Rate

Reverse Repo Rate

RBI Policy Rates

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ce: C

SO

Chart 3: Contribution to IIP Growth in November 2010

8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

-6.0%

Non-Durables1.5%

Durables1.9%Intermediate 1.9%

Basic2.0%

Capital -3.6%

Manufacturing 2.9%

Mining 0.1%

Electricity 0.7%

3

2.5

2

1.5

1

0.5

0

-0.5

Sep-

2010

June

-201

0

July-

2010

Aug-

2010

Oct

-201

0

Nov-

2010

Dec-

2010

November

November

6%

7%

5%

4%

3%

2%

1%

0%

Mar

-201

0

Apr

il-20

10

May

-201

0

June

-201

0

July

-201

0

Aug

-201

0

Sep

t-20

10

Oct

-201

0

Nov

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0

Dec

-201

0

Jan-

2011

Feb-

2011

Mar

-201

1

December

December

M N C WATCH M A R U T I S U Z U K I I N D I A L T D

The Japanese auto giant leaves competition miles behind with relentless quality control, early-bird advantage and proven performance on Indian roads. BY RUCHIRA MITTAL.

COMPANY DASHBOARD

PROFIT AFTER TAX (2010-11):INR 2,288.6 crore

VEHICLES SOLD:12,71,005

NET SALES:INR 36,611 crore

MARUTI SUZUKIRIDING THE WINDS


M A R U T I S U Z U K I I N D I A L T D M N C WATCH

THE SUZUKI MOTOR Corporation of Japan liter-ally started the automobile revolution in India. It began manufacturing cars in India in 1981 through a subsidiary called Maruti Udyog Limited. It was later rechristened Maruti Suzuki Industries Ltd

(MSIL), and has since ruled the Indian automobile market. Aptly named after the son of the Wind God, Suzuki’s veture can easily be said to have given Indian motorists wings.

Manufacturing only two brands in its first five years – the small car Maruti 800 and the Omni van – the company today has an impressive line up of 14 models, not all of them small.

The zippy, yet efficient, Maruti car soon caught the imagination of the nation. The car company became the first in India to produce and sell more than a million cars. The delighted smiles of happy customers have not waned and MSIL has an enviable 53.3 per cent of the Indian passenger car market under its belt. It accounts for 40 per cent of Suzuki's global turnover, making India the company’s largest market.

The Hindustan Ambassador and the Premier Padmini were the only choices in India in the passenger car segment when Suzuki entered the market 30 years ago. It burst onto the Indian automobile scene with style, flaunting a streamlined design, bright colours, a fuel efficient and powerful Japanese engine and great after sales service to boot.

There has been no looking back since. Backed by impressive facilities at Gurgaon and Manesar in Haryana, near capital New Delhi, Maruti has a total installed capacity of rolling out one million units each year. It is committed to investing large sums to upgrade each of its units. It has invested INR 9,000 crore (a little more than US$ 2 billion) in the past five years to upgrade the building capacity and to nearly double the dealer network across the country. It has 1,000 dealers and looks at notching the 2,000 mark in outlets by 2015. The pace is fast and focussed, as by 2013, Maruti will have the capacity to manufacture 1.7 million vehicles. The next three years will see an additional investment of over INR 6,000 crore (US$ 1.34 billion). The company is also working at increasing its dealer sales force from 20,000 to 50,000.“To sustain our growth in the domestic market, we have to

move faster and penetrate deeper,” said Mayank Pareek, man-

aging executive officer (marketing and sales), MSIL. “With improvement in road infrastructure, the smaller cities are now well connected. Though we are already well represented in most parts, we want to strengthen this further in line with our projections of growth.”

The Gurgaon facility has three state of the art plants spread over a 300-acre complex. The company’s prized K-series plant is also in Gurgaon. The K-series engines are designed with cutting edge technology, and are made in two capacities of 1 litre and 1.2 litres. This plant was commissioned in 2008 and has an installed capacity of half-a-million units. These engines are highly fuel efficient and technologically advanced. They power several popular Maruti Suzuki cars such as the A-star, Estilo, Swift, Swift Dzire, Ritz and WagonR.

Its plant at Manesar compares with the best in the world. Designed to manufacture diverse cars, the plant was inaugurated in 2007. It rolls out highly popular cars that the company calls World Strategic Models—Swift, A-star, SX4 and Swift DZire. Superb automation and robotic control in the workshop ensure a high degree of pre-cision in manufacturing Maruti cars at this plant which is the company’s fourth unit with a capacity of 300,000 units. Looking ahead, the company has announced an investment of INR 1,700 crore (US$ 380 million) to increase this plant’s capacity by 250,000 units this year.

The work culture at Suzuki’s manufacturing units is unparalleled in the sector. To man these power-ful plants, highly trained people are in place. The company places great

importance on the safety of those who work at the facili-ties. It works on the premise that safety begets quality. At any time, more than 80 engineers are at work at the units after having received intensive training in Japan. This ensures that the research and development team is as driven as that in Japan.

Maruti produces and sells more than 1.2 million cars every year. That’s roughly half the total number of all cars sold in the country - a feat that even global giants like Toyota and GM cannot match in their home markets. Maru-ti is so far ahead of even second-placed Hyundai, that just its Alto sells more per month than all of Hyundai’s cars put together. Having more than half the market, the company

“THE SMALLER CITIES ARE NOW WELL

CONNECTED. THOUGH WE ARE WELL

REPRESENTED IN MOST PARTS,

WE WANT TO STRENGTHEN

IT, IN LINE WITH OUR GROWTH

PROJECTIONS”


M N C WATCH M A R U T I S U Z U K I I N D I A L T D

not only has the lion’s share of the domestic market, but it also exports cars to 120 countries including, Finland, Switzerland, The Netherlands and Italy. In 2009-10 exports grew by 111 per cent. The A-star is a top favourite in all markets. Maruti introduces entry level models to foreign markets and is focussing on indentifying new markets. The A-star is a manifestation of Maruti’s aspirations to grow into a global hub for manufacture and exports of small cars. Other cars popular overseas are the Alto and the all-time favourite Maruti 800.

In India, Maruti is working at improving its rural customer interface. It has 3,600 rural development sales executives (RDSEs). There is one posted in almost every taluka (an administrative cluster of villages, making up a district) in India. The company’s chief general manager Shashank Srivastava calls the ebullient rural market in India “a surprise discovery.” During the recessive years of 2008-09, when the urban markets took a beating, Maruti’s rural customers kept the company buoyant.“Alto and WagonR are the largest selling models in rural

areas. Good rainfall, better farm output, growing non-agri-cultural income, and improving infrastructure all contribute to the spurt in car sales in these predominantly agrarian regions,” said Srivastava.

The economic downturn has impacted everyone, and MSIL is no exception. In its recently released annual results for 2010-11, the company said that although it had earned a profit of INR 2,288 crore (more than half-a-billion dollars), it was less than the previous year’s profit. This, in spite of having sold more than 1.27 million vehicles during the year, almost 25 per cent more than in 2009-10. But the Indian economy is on the upswing, consumer income and confidence are soaring, and that is good news for the automobile sector in general, and market leader MSIL in particular.

Maruti was perceived as a foreign car when it first came to India, but the company worked at making cars that suited the Indian driving environment. S. Nakanishi, Managing Direc-tor and CEO, says, “Over the last 25 years, the Indian automo-bile industry has undergone great transformation in terms of product range, customer expectations and competition. The gap between the quality of cars sold in the developed markets

and that of cars sold in the Indian market has narrowed down considerably. Customers in India are fast becoming aware of sustainability issues such as global warming, energy security and the overall well-being of the society.”

Maruti Suzuki works on the "lean manufacturing" concept of its parent company, Suzuki Motor Corporation. Lean manufacturing is used under the Suzuki Production System (SPS). The management knows well that customer satisfac-tion and delight stem from excellent manufacturing, down to the last coat of shiny paint.

Each employee is sensitised to the virtue of cost effective-ness—critical to keeping the cost of production under con-trol. This leads to lower price tags on cars which add to the customers’ delight. “Do it right the first time” is the mantra at the manufacturing units. Repeated inspections ensure that the car that finally leaves the assembly line is made error-free to the maximum possible extent.

To ensure the least possible error, sometimes even caused by worker fatigue, automation and robotics are the com-pany’s top priority. Constant efforts at improvement have paid Maruti handsomely—in 2006-07, the company had an installed capacity of 350,000 cars, but it actually rolled out 600,000 vehicles by simply streamlining the production pro-cess and getting more out of everyone.

Producing nearly five cars a minute at its twin factories in Gurgaon and Manesar, the company crossed an important milestone in March this year—it became the first car maker in the country to produce more than 10 million vehicles. While it took 22 years to produce five million cars, the next five million have taken a mere six years and the last 3 million were produced in the last three years of slowdown.

Sure, the company has had the early bird advantage of hav-ing arrived first on the scene. But it has also had to literally build its own road to success. Winning the hearts of Indians was not an easy task, as early critics were wary of the fresh-from-Japan cars that could fail on the tough and demanding Indian road conditions.

The resilient car has not only lasted that long, but has flour-ished in the Indian environment, almost as if it was designed for Indian roads. Miles ahead of the competition and speed-ing away, Maruti Suzuki is here to stay.

PRODUCING NEARLY FIVE CARS A MINUTE AT ITS TWIN FACTORIES IN GURGAON AND MANESAR, MSIL BECAME THE FIRST CAR MAKER IN THE COUNTRY TO MANUFACTURE MORE THAN 10 MILLION VEHICLES



ADVE R TO R I AL

Prime Minister Inaugurates DP World’s Hi-tech Cochin Terminal

On February 11, 2011, Prime Minister Dr. Manmohan Singh opened DP World’s Vallarpadam terminal in Cochin, Kerala. It is India’s first ever dedicated transhipment and gateway hub. The opening ceremony was attended by more than

5,000 customers of DP World, officials and dignitaries.Dr Manmohan Singh, together with DP World Chairman Sultan

Ahmed Bin Sulayem, had laid the foundation stone for the Vallarpadam International Container Transhipment Terminal (ICTT) in February 2005, and in this year’s ceremony, the Prime Minister dedicated the new terminal to the nation. The terminal is a public-private partnership between DP World and the Government of India, with Container Corpo-ration of India (Concor), Transworld and Chakiat as strategic partners.

The largest single operator container terminal in the country, ICTT, to be operated as DP World Cochin, was built at a cost (including other infrastructure facilities such as road and rail con-nections) of more than US$ 600 million (around INR 3,000 crore). With the opening of the new facility, container handling will move entirely to DP World Cochin from the nearby Rajiv Gandhi Termi-nal. The older facility may be converted by Cochin Port Trust to handle greater volumes of non-containerised bulk cargo.

DP World Cochin will be completed in three phases. In the first, the 600-metre-long quay with a draught of around 14.5 metres will simul-taneously serve several of the world’s largest container ships - those with a nominal capacity of around 10,000 TEU (twenty foot equivalent container units) - with the capacity to handle one million TEUs annually. Capacity will expand in line with market demand, increasing to around 1.5 million TEUs in the second phase. Once fully commissioned, the capacity will be around 4 million TEUs.

In a true PPP approach, the government has also constructed and enhanced supporting infrastructure such as a four-lane national high-way connecting the terminal to the rest of India. A new 8 kilometre long electrified rail link will also allow 15 trains to serve the terminal daily, connecting customers directly with India’s national rail network.

Sultan Ahmed Bin Sulayem, Chairman of DP World said:“We are extremely honoured that the Honourable Prime Minister of India, Dr Manmohan Singh has opened our newest terminal and thank him sincerely for marking both the start of the project with the laying of the foundation stone and the completion of it with the ceremony. The opening is testament to his vision, and making that vision a reality. We are pleased and proud to add Vallarpadam to our global portfolio. This world class facility will significantly reduce both time and costs for India’s importers and exporters, improving their competitiveness and contributing to the development of India’s vibrant economy.”

Mohammed Sharaf, Chief Executive Officer, DP World said: “The opening of India’s first transhipment terminal and gateway hub is an historic event. DP World Cochin offers customers world class, reli-able, value added services with excellent road and rail connectivity for greater efficiency, helping them to get their goods faster to markets at competitive prices. The terminal’s services and state of the art facilities provides an outstanding option for shipping lines looking to tranship in the region.“

COVE R S TORY I N D I A C O N N E C T E D

The telecommunications revolution has brought a new kind of freedom to India. And the mobile phone has spearheaded this revolution. Mobile phones connect every Indian to every other and to the whole world. It is not just for talking that people whip out their cellphones. The bulk of the Indian business is conducted on phone—from promoting products to plac-

ing orders to tracking them to making payments, the minutest of business activities now happens on the phone. People are communicating not only by voice, but by text messages, email and closed group messenger services.

So, whether you are buying vegetables, grocery, a laptop, a car, an air ticket or a house, all you need to do is get on the phone. Business models that were unthink-able a decade ago are now being discussed at management schools. Just Dial, the phone-based business directory, is a runaway success, and a tool that urban phone

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Adding as many subscribers every two months as the entire population of Canada, the mobile phone revolution has changed the way Indians do business. BY SHUBHA SINGH.

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company. None of this was possible if the voice and data were not flowing as freely as the air in the room, or the water in the tap.

The entire nation is doing business on the phone, not just corporate honchos. When people meet for the first time, or after a long time, mobile phone numbers are the first to be exchanged between them. In the cities at least, there isn’t a hawker, street vendor, domestic help, fisherman, construc-tion worker, three-wheeler driver, dockyard worker or goods loader, who does not use a cellphone. From confirming an order, to giving driving directions, to fine-tuning the order, everything is happening on the phone. At any given time of day, or night, millions of people are talking, texting or check-ing their cell phones for messages. However, it isn’t just for business that people use the phone. For the most part, the phone has also replaced the transistor radio, beaming bol-lywood and folk numbers, talk shows, news and sports com-mentary from every shirt pocket. Not long ago, what used to be the domain of the postcard, and then the inland letter and greeting card, has now been completely sucked into the airwaves. During major festivals, rivers of text messages crisscross the national and international airwaves, wishing people the best of Diwali or Holi or Eid or Christmas. That it is an excellent business opportunity for the telecommunica-tion companies is the icing on the cake.

All Cylinders FiringIf the mobile phone has churned up a revolution of

sorts, the Internet has been no less a success story. The software boom would have been much more subdued, had web portals like Naukri.com not galvanised the workforce into a national online database. An entire nation got busy making CVs and writing covering letters in anticipation of landing coveted jobs. Those without computers or online connections, or both, thronged the hundreds of thousands of Internet cafes nationwide, spawning an entirely new line of lucrative business.

But people were not only conducting business. They began

users can hardly do without. You can call a radio taxi to your doorstep or to a busy street corner in the heart of town by simply calling on the phone. Order placing has transitioned so completely to the phone domain that home delivery has taken on an entirely new meaning—companies swear on television that if they do not deliver within a prescribed time, you pay nothing for the food you ordered. Come election, and you could wake up to a recorded phone message from a lead-ing politician or public personality, asking for your precious vote. Innovative Indians have also adapted cellphones to remotely operate electrical equipment, especially for villagers who have to trudge miles everyday to switch on and switch off the irrigation pumps on their fields. Since only the calling party pays, if not on roaming, people have devised creative ways to communicate that beat even the ‘collect call’ fad of the 50s and the 60s—by placing a ‘missed call,’ they let their employers or loved ones know that they are ready to talk. The party that can pay, then places a call. Property developers are literally launching their new schemes through bulk text mes-sages sent out in millions everyday.

Cellphones Are EverywhereThe very foundation of the Indian BPO edifice rests on the shoulders of the telecommunications industry. In offices of Bengaluru, Gurgaon or Hyderabad, bleary-eyed young men and women hunch over computer screens, speaking softly into their microphones in varying accents, to customers across the globe. They accomplish service at prices that were unimaginable to global giants like IBM, Boeing, American Airlines, and almost every Fortune 500

By end February, India had more than 826 million phone

subscribers, taking the overall teledensity to nearly 70%

— Telecom Regulatory Authority of India's April report


networking exponentially, harnessing the nodal energies of platforms like facebook, orkut, twitter and a host of other applications. Soon, people were attending online classes, participating in discussion forums and simply airing their views. When the Internet became available on the phone, networking turned a new corner and chats and twit-ter went into nuclear fission mode.

Flashback to the 1980s when telephones were a luxury. The waiting list for a wired telephone connection was of 20 million people. Back to the present, land lines are still widely in use, but not much, com-pared to the mobile phone.

India is connected, and the benefits are showing. From the poorest to the richest, every Indian has the ability to call another, reach out, do business, and communicate.

India is pushing the right buttons and enjoying it, too. The mobile phone and the connectivity it promises have caught the imagination of Indians across the spectrum and through all layers of the society. Among all the world’s telecom-munications markets, India’s has grown at the fastest clip. The growth is particu-larly impressive in the background of the global economic meltdown and reces-sion. To a large extent this growth has come from the service providers’ ability to offer innovative and low tariff plans.

The Numbers Are TalkingToday, with CDMA and GSM technolo-gies, one can get a handset with a pre-paid connectivity and a few hundred free calls for as little as US$ 25. Call rates, including long-distance calls, are just about 2.5 cents per minute. And as operators reach the numbers required, the rates are set to go down further.

According to Rajan S Mathews, director general of the Cel-lular Operators’ Association of India (COAI), “India is the fastest growing and second largest mobile telecommunica-tions market in the world, with an exceedingly high wireless teledensity of more than 64 per cent. The sharp growth in teledensity over the last decade has made the India story, a success story which is unmatched. The mobile subscriber base is expected to touch 950 million by the end of this year and to cross the one billion mark by the end of next year.”

On the market’s potential, he said: “India is the most

affordable mobile market in the world with an impressive average return per user (ARPU) of US$ 3 per subscriber per month. Driven by this affordability, we are adding more than 17 million subscribers every month - that's more than half as many people as the entire population of Canada.”

The sector is a strong contributor to GDP. According to the Department of Telecommunications (DOT), in 2009-10, telecommunications services earned nearly INR 158,000 crore (US$ 35.2 bil-lion), registering a modest but creditable increase of about 4 per cent, in spite of the unprecedented recession. According to the Department of Industrial Policy & Promotion’s fact sheet on foreign direct investment (FDI), the sector has received nearly US$ 10 billion in FDI since 2000.

Samaresh Parida- director strat-egy Vodafone Essar, says: “India is an extremely attractive telecom market. Tele-communications operators in the country have the advantage and opportunity to bring positive reforms to the entire sec-tor. The country’s communicative society is the ideal ground for a communications company. With faster consumer adoption, growing demand and opportunity that lies in rural telephony, telecommunications companies are looking forward to servicing this untapped section of the market. The growing demand for broadband and wire-less connectivity are some of the factors that make India an attractive destination.”

Expanding ExponentiallyIn April, this year, the Telecom Regula-tory Authority of India (TRAI) released its start-of-the-year telecommunications performance report. Just between January and February this year, more than 20 mil-

lion new phone subscribers had joined India’s phenomenal growth story. At the end of February, India had more than 826 million phone subscribers, taking the overall teledensity to nearly 70 per cent. According to the report, in the cities, there are more than 551 million subscribers, compared with 275 million in the villages. Nationwide, the total number of broadband subscribers stood at nearly 11.5 million.

A person born in the India of the late sixties can be sur-prised at the ocean of information at the hands of the masses now. Lauding the Indian telecom market and its phenomenal

Delhi-based Ekgaon Technolo-

gies has developed a system

for tracking transactions

made by self-help groups

that form the backbone of the micro-

finance network of India. The firm has

partnered with the likes of CARE, World-

Vision and the World Bank to conduct a

pilot, which it plans to extend to 14 states

across India.

Tata Consultancy Services' mKrishi

connects farmers with an ecosystem that

empowers them to make sound decisions

about agriculture, drive profits and con-

serve the environment. The Mobile Agro

Advisory System gives farmers updated,

personalised information and advice on

the weather, soil, fertilisers, pesticides,

types of seeds, crops available in the

market and local market prices.

Power to the people



growth, N K Goyal, president, Communications and Manu-facturing Association of India (CMAI), said: “We are adding about 18 million mobile connections every month, which is nearly six times higher than China. Quick to adopt new tech-nology, we have a mix of CDMA and GSM, and more, avail-able. We’ve started third generation (3G) mobile telephony and we’re already talking of 4G.”

Those who can afford it, have the world in the palm of their hands with smart phones. So whether it is information about job interviews or animated discussions on the meanings of words, everything is available on the mobile phone. People are willing to pay for quality.

Goyal adds “Our tariff is perhaps the lowest in the world—at 1 paisa per 9 seconds. You can pay INR 5 and use the Internet on your mobile for a whole day—not possible any-where else in the world. However, in spite of this low tariff, the profitability of the service provider is almost 25 per cent, again the world’s highest.”

Parida of Vodafone adds: “The urban mobile penetration currently exceeds 130 per cent. Given the rapid saturation of the voice market, the urban population will now take to data consumption with the arrival of 3G and Broadband Wireless Access (BWA). However, in rural India, voice based penetra-tion is only 25 per cent. Hence, one sees a growth among smaller towns giving way to various usage models such as banking transactions and information sharing.”

The Rural ThrustAccording to DOT’s Monthly Telecom Sce-nario for August 2010, rural teledensity is a little less than 30 per cent, indicating huge untapped potential for the sector. The statis-tics are interesting—70 per cent of India’s population lives in its villages, 30 per cent in the cities. However, the teledensity numbers are just the reverse.

As the penetration rates in the metropoli-tan cities touch 100 percent, those markets are nearing saturation, showing signs of maturity. Rural India is the key target market likely to drive the next round of growth, particularly for voice-based services. High-speed 3G and BWA will further energise the market. According to Mathews of COAI: “In the coming years the key focus areas of the service providers will be on expansion of service to rural areas, adop-tion of new VAS applications, Mobile Banking and provision of data service.”

With the rural population taking to the handset like a fish takes to water, the possibilities are endless. Banking, educa-tion, information, business and more are all jostling for space and keeping a keen eye out for opportunities to flood rural India with. The times are exciting and a bird’s eye view shows an India which is on the fast track to growth simply

because of the tremendous power communication brings.TRAI’s figures of October, 2010, place the number of

broadband subscribers at 11.5 million. However, 650 million potential customers are waiting to be tapped. The recent auctions of the BWA and 3G spectrum will increase wire-less broadband penetration nationwide. Parida of Vodafone Essar says: “Targetting the rural market will be one of the trends that will be popular amongst the Indian companies. By 2012, if telecomuunications operators are able to catch the imagination of the people who farm and live in the villages of India, rural users will account for more than 60 per cent of the total subscriber base.”

Planning For GrowthThe government opened up mobile services to private participation in 1994-95. It recently constituted a committee under Sam Pitroda, the adviser to the Prime Minister, to look into the issues related to the national broad-band plan. Nandan Nilekani, chairperson of Unique Identification Authority of India, will be the co-chairman of the committee. The plan is to take the optical fibre network to every village panchayat.

The drive for broadband will ride on high-speed, high-dependability optical fibre cables. India and China alone account for about

one-third of the global demand for the cables. All Indian operators together have nearly 1.15 million route kilometres of largely optical fibre-based wireline.

Such is the pull of the market, that last year’s auction of third generation and BWA spectra brought in more than a trillion Rupees in fee to the government.

A Bharti spokesman told India Now: “With the ever increasing penetration of mobile telephony which is cover-ing India’s length and breadth, the industry is witnessing a major shift. With the increasing young population where emerging markets are recognised as the new drivers of growth, the country is about to experience an information

In its 2009-10 annual report, the Department of Telecommunications targets achieving 40 per cent rural teledensity by 2014

US$ 8billion

Volume of mobile money sales in emerging

markets by 2012


I N D I A C O N N E C T E D COVE R S TORY

explosion on mobile devices like never seen before. This flags off an industry shift from voice to data which includes the demand for services like m-commerce.”

Broadband’s overarching application in education, healthcare, e-banking, e-commerce, entertainment, utility and e-governance makes it indespensable. DOT plans to gift computers and broadband connections to every gram panchayat. Mathews adds: “The next wave of growth will come from semiurban and rural areas. Connecting the unconnected will be the prime focus in the coming months as we look towards a great rural push by all service providers. Operators will devise various cost efficient ways to deploy networks in the rural and uncovered markets so as to tap new revenue streams.”

Vodafone Essar’s Parida says: “The rapid growth of the mobile industry in India was led by a joint effort by opera-tors and regulators... People will get used to data usage, which will increase the use of internet on the go. There will be different kinds of services, applications introduced which will make the handset of tomorrow a bigger part of customers’ lives.”

Making It HappenThe excitement is not misplaced and planners who work hard at trying to deliver even basic education to the rural population are excited at the opportunity. It seems entirely possible that education will be home delivered to the people living in areas where the penetration of conventional education systems seems difficult. In its 2009-10 annual report, DOT stated that it had set itself the target of achiev-ing 40 per cent rural teledensity by 2014. The Department of Information Technology intends to set up more than 1 million internet enabled Common Service Centres (CSC) across India under the National e-Governance Plan (NeGP). The Department of Education has also started to provide

You can pay INR 5 and use the Internet on your mobile phone

for a whole day—not possible anywhere else in the world.

— N K Goyal, President, Communications and Manufacturing Association of India

broadband connectivity to 20,000 colleges in the country for enabling the use of e-content for education. The govern-ment’s Telecom Equipment and Services Export Promotion Council aggressively promotes the export of telecom equip-ment and services from India.

Several operators have started offering m-education ser-vices such as English lessons, dial-in tutorials, school syllabi, question sets, vocabulary and general knowledge tutorials, examination tips, result alerts and education for the physi-cally challenged. These operators usually partner with VAS companies to develop the applications. Some such applica-tions are m-Gurujee, the English Seekho service and Learn English. Mobile broadband can also help expand tertiary edu-cation, especially among low and middle-income students.

The health sector is poised to harness the power of telecom-munications in a big way. In 2007, handset manufacturer Ericsson started its ambitious Gramjyoti project in partner-ship with Apollo Hospitals. It provided ECG, blood pressure and heart beat measurements, teleconsultation and basic medical checkups, including live interactive checkups and reporting, to people in remote areas. A Real-Time Bio-surveillance Programme was piloted in the Sivaganga District of Tamil Nadu. It used sophisticated analytical tools on data sent on mobile phones by village level nurses, harnessing


mobile technology for disease reporting, surveillance and health strategy planning.“With the voice market maturing, operators are

looking to data services as a new cash cow... Video calling, mobile live TV streaming and application downloads will be some of the content based services that will see faster adoption,” adds Parida.

Banking On MobilityAccording to the worldwide GSM Association, by 2012, mobile money in emerging markets will bring in nearly US$ 8 billion in sales for operators. Of this, money transfer ser-vices for handset owners without a bank account itself would result in US$ 5 billion of transaction fees and text message linked revenues, with the remainder coming from indirect benefits such as customer loyalty.

Mobile banking has already taken off in India. Offerings from some operators enable mobile phone users to send or receive money instantly between their banking accounts, using their mobile phone to authorise the transfer. The nation’s largest telecom service provider Bharti Airtel has teamed up with the largest lender, State Bank of India (SBI), to launch an ambitious mobile banking joint venture. At the same time, the country’s second-largest GSM mobile com-pany Vodafone Essar Ltd, has announced a tie-up with ICICI Bank Ltd to offer electronic payments.“This will be a complete game changer, leveraging SBI’s

expertise in the banking sector along with Airtel’s more than 150 million strong customer base and ecosystem of over 1.5 million retailers and distributors across India,” said Sunil Mittal, chairman, Bharti Airtel.“Driven by the roll-out of 3G, the next five years will see the

introduction of new service segments, such as M-education, M-health, M-commerce... Therefore the coming years will also

see a great thrust on expansion of mobile banking services in India,” says Mathews.

Stellar WorkBharti Airtel has partnered with the mighty Indian

Farmers’ Fertilizer Cooperative Limited (IFFCO) to set up a farm news and update service in Rajasthan, where

IFFCO provides subsidised mobile phones to farmers. These phones are loaded with green SIM cards, which flash daily updates on agricultural practices and weather forecast, free of cost.

HDFC bank has set up a BPO centre at Tirupati in Andhra Pradesh through its subsidiary Atlas Documentary Facilita-tors. It employs 550 people who perform data capturing and indexing of customer details. Earlier, this job was being handled by more than 1,000 people in Chennai and Mumbai.

Sriperumbudur in Tamil Nadu is reported to be producing more mobile phones than Shenzhen in southern China. This is not a small achievement, considering Shenzhen makes one out of eight handsets sold anywhere in the world.

Quoting industry experts, an IBEF telecommunications report said that by 2014, India could gain the third spot by capturing 8.5 per cent of Asia-Pacific’s telecommunications equipment production revenue. India is likely to be the fast-est growing telecommunications equipment production mar-ket in this region over the next five years. The industry also has the cost arbitrage arising from competitive labour costs and lower cost of establishing a manufacturing plant in India.

Says Goyal: “India has a large market for telecommunica-tions equipment, of which locally designed and manufac-tured equipment accounts for INR 1,000 crore (US$ 223 million) a year. If we include the manufacturing of towers and batteries etc., then the figure goes up to INR 20,000 crore (US$ 4.5 billion) per year.” A recent report by research firm Gartner, says India is the fourth largest telecommunica-tions equipment manufacturer in the Asia-Pacific region. The country had a 5.7 per cent share in the US$ 180 billion

The transaction is the largest ever cross-border deal in

an emerging market and will result in combined revenues of US$ 13 billion

— Sunil Mittal, Chairman, Bharti Airtel on acquiring Zain Telecom's African business in June, 2010


I N D I A C O N N E C T E D COVE R S TORY

revenue from telecommunications equipment production in the region in 2009. By 2014, this revenue is expected to increase to US$ 277 billion, in which India would have an 8.5 per cent share. This would help the country move to the third spot (after China and South Korea) in terms of telecommuni-cations equipment manufacturing in the region.

According to TRAI, there are 15 operators in the Indian market offering the lowest mobile tariffs across the globe. Private operators hold almost 90 per cent of the wireless market, the rest shared by the two public sector operators BSNL and MTNL. “India is not only inviting investment, but Indians are also buying businesses internationally, whether in Africa, or other parts of the world. Almost every big company in the world has invested in this sector in India," says Goyal, who is also the head of the Telecom Equipment Manufacturers’ Association of India (TEMA).

Market ConsolidationIn June last year, in the largest ever telecommunications takeover by an Indian firm, Bharti Airtel completed a deal to buy Kuwait-based Zain Telecom's African business for a

little less than US$ 11 billion. Announcing the closure of the deal, Bharti chairman Sunil Mittal said, "We are delighted at the closure of this transformational deal for India and Bharti Airtel. The transaction is the largest ever cross-border deal in an emerging market and will result in combined revenues of about US$ 13 billion." The deal allows Bharti control of Zain Telecom's operations in 15 nations. Other than giving Bharti access to lucrative African markets, the acquisition makes it the world's fifth largest wireless company with operations across 18 countries and a rapidly expanding subscriber base of around 180 million. Founded in Kuwait, Zain has com-mercial presence in seven countries across Africa and the Middle East with more than 37 million customers. Zain's One Network is the world’s first borderless mobile service offering over 64 million Zain customers in 21 countries favourable rates, free of high roaming charges for cross-border communications.

In another buyout, closer home, Vodafone is to pay US$ 5 billion in cash to buy out Essar Group from their Indian joint venture. Vodafone will take over Essar's 33 per cent of Vodafone Essar, giving it direct ownership of 75 per cent of the country's third-biggest operator. The remainder is owned by Vodafone's Indian partners. It also highlights just how much money and trust Vodafone, the world's largest operator, has placed in Asia's third-largest economy and the fastest-growing mobile market in the world. In 2007, Vodafone paid US$ 11.1 billion for control of the carrier in what remains the largest foreign direct investment to be completed in India.

N K Goyal sums it up rather well when he says: “The spread of the telecom sector is empowerment for the average Indian. It is such a delightful sight to see people of all sec-tions of the society pull out a mobile phone and talk. Telecom in India has empowered the people to do business. Nowhere in the world, mobile screen wallpapers bring so much revenue to operators as they do in India. Airtel makes more money from the download of songs and tunes than even the conventional music companies that have been in the music business for decades. This is innovation. Also, nowhere in the world will you find a cellphone for less than ten dollars, with FM radio, colour screen and a load of functions. But you do, in India, with a one-year warranty and after sales service.”

The indianisation is complete. Mobile phones have wall papers of Ganesha and Laxmi depending on the festival or the need of the moment. Ring tones jostle for attention and can be a study in the personality of the user!

That could be the crux of India’s telecommunication revo-lution. Easy, affordable, within reach, communication. Inno-vative, hard working and quick to improvise, Indians have seized the opportunity. Now, you can order fresh vegetables any time, anywhere, transfer money, any time anywhere and reach out to anyone—all with the touch of a few buttons. This is a nation truly connected.

Airtel has launched an ambitious mobile banking joint venture with the State Bank of India; Vodafone

has tied-up with ICICI Bank to offer electronic

payments

E M E RG I N G E NTR E PR E N E U RS M A S P L A N T I Z T E C H N O L O G I E S

If you are reading this article, then you most likely switched on a light in your room and are sitting comfortably in a chair. It wouldn’t matter to you how the electricity came to be inside the house, in the wire, at the substation or on the high tension pylons that line

the highways across the nation. But each time you use elec-tricity, someone, somewhere worked really hard to make sure it worked right for you. This isn’t about gen-erating electricity or supplying it. It is about a bulky, ugly,

MACHINESMonitor

A group of bright young IIT engineers helps transformer

manufacturers the world over solve a problem that has given

them sleepless nights for years.BY RUCHIRA MITTAL


M A S P L A N T I Z T E C H N O L O G I E S E M E RG I N G E NTR E PR E N E U RS

humongous yet deceptively delicate transformer that crawled its way through the highways, to be installed somewhere near your house.

A power transformer weighs 180-200 tonnes. Its thick metal casing makes it almost impenetrable. It certainly does not look like fragile equipment. How-ever, inside the metal casing, it is rather delicate. This huge metal structure costs nearly INR 12 crore (US$ 2.75 mil-lion), and both the manufacturer and the buyer want it installed glitch-free.

The challenge lies in transporting this equipment to the power grids

which are often miles away from the manufacturing units of transformers. Engineers find the task of babysitting a power transformer during transporta-tion daunting, to say the least. The checks for stability have to be con-ducted every half an hour and the task is tedious, especially as transformers are transported on large trailers that crawl at 20 kmph. Each shock and jerk has the potential to damage the transformer, as do changes in temperature, pressure and humidity. The liquid nitrogen cool-ant inside the transformer also shows changes in levels and has to be checked.

This entire process of humanly moni-toring transformer health seemed a necessary evil and engineers assigned to transporting them across the country, were resigned to their fate.

It took a group of bright young boys from the Indian Institute of Technology (IIT) to question why a machine could not monitor a machine, why couldn’t software systems, instead of humans, check the effects of shocks to a trans-former and increase efficiency, or why couldn’t damage reports be generated at the end of the transportation, or even better, during the journey itself?


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E M E RG I N G E NTR E PR E N E U RS M A S P L A N T I Z T E C H N O L O G I E S

That’s how Masplantiz Technologies was born in Gurgaon in 2004. Of the five engineers who started the firm, four belong to IIT—Shashin Mishra and Pradeep Gatram from IIT Kanpur, Ashutosh Fonia from IIT Delhi and Mayank Chauhan from IIT, Mumbai. Marine engineer from the TS Rehman Institute in Mumbai, the fifth partner, Atindra Chandel, is no less bright.

The group cobbled together a meagre sum of INR 16 lakh (a little more than US$ 36,000) and put their knowledge to test. They worked on developing software which could remotely sense and monitor data and analyse it from the relative com-fort of an office. This software would save on manpower, be cost effective and envi-ronmentally friendly. The team has been lauded for developing the core software on their own. For developing the sensor and wireless device drivers, Masplantiz worked with their individual producers.

In 2008, Masplantiz launched its soft-ware solution, MIMTIS. This offers solu-tions for both offline and online remote monitoring (in transit). Companies can purchase the software for an initial licence fee, and follow up with an annual renewal fee. Masplantiz also provides the buyer all new releases of the software without any additional cost. Currently, the company is working at building a custom-er base with two industries — power and wind energy. Later, it will target two more industries: material handling, and power transmission and distribution. Here, says Shashin Mishra, Masplantiz spokesman,

“our product will be part of the smart grid.”Masplantiz Technologies got its first

break from Crompton Greaves Ltd, part of the US$ 4 billion Avantha Group, and established manufacturer of trans-formers, switchgear, fans, motors and a host of electrical equipment. The company was looking for a monitor-ing solution for an overseas shipment. Word spread and Mishra says there has been no looking back, since. Cor-porations in wind energy and power transformer businesses are using the Masplantiz system on a pilot basis for some time. Masplantiz approaches a

company with the offer of maximis-ing its profits through MIMTIS, its machine monitoring solution allowing for remote measurement of data.

The software is an economical and reliable system to remotely monitor transformers during their transporta-tion. Using it, engineers will know which faults have occurred in the equip-ment, and exactly where. Each problem can be tackled before installation. Even after the transformer is installed, MIM-TIS can relay warnings about impend-ing trouble and can prevent accidents like fires from short circuits.

The software has proven particularly useful for monitoring high wear-and-tear windmill turbine generators, especially when fitted out with the Ethernet, GPRS, WiFi and satellite communication devices.

The company has a lofty mission statement: “To gather asset and equipment data online, analyse it and provide information that helps our customers maximise profits and reduce environmental impact.”

The team needs to scale up and talks are on with large companies. It has secured working capital from HDFC bank and this year, Masplantiz hopes to secure US$ 10 million of funding from venture capitalists.

Five years on, “more than 60 per cent of transformer manufacturers in India are our customers,” claims

Mishra. The Thane-based Emco is a happy customer and uses Masplantiz’s system to monitor transformers sent overseas. “Even the countries we export to, have accepted Masplantiz’s system,” M.L. Jain, Vice President (Technology) of Emco told Businessworld magazine in an interview in 2009.

Public sector electrical machinery giant Bharat Heavy Electricals Limited (BHEL), Bhopal, had been one of Mas-plantiz’s toughest sales calls because its engineers were unwilling to take chances with such expensive machin-ery and the critical nature of its func-tions. They were, naturally, resistant to the idea of dropping their existing human checking system, and relying entirely on technology. But when they saw what the monitoring system could do, they took to it wholeheartedly.

In today's world of critical equip-ment care, machine-to-machine remote monitoring covers industries including power generation, telecom-munications towers and networks and nuclear power plants.

One of the world's largest clean ener-gy companies, Suzlon, has shown keen interest in Masplantiz’ solutions, says Mishra. At home, leading manufactur-ers and logistics companies are equally receptive to its ideas. With so much interest in our work, the sky is the limit, really, adds a smiling Mishra.

POWER TRANSFORMERSTransporting high value power transform-

ers is a delicate task in itself. Their large size,

weight and remote locations of installation

add to the challenge. Power transformers

are usually very sturdy, but a fault can spell

catastrophe. Jerks and shocks during trans-

portation can displace the precision windings

within the metal casing, often leading to

equipment malfunction.

Shock can also erode the insulation between

the turns of the windings, leading to short cir-

cuits when the machine is powered on. Not

only that, the mechanical vibrations can make

the windings lose their clamping pressure,

reducing the overall life of the equipment.

Transformers handle extremely high voltage

that travels in high-tension cables, and turn

it into usable electricity. In so doing, they

absorb high amounts of heat.

They must withstand shocks of sudden surges

and spikes in supply and fluctuations in voltage

as well. Over and above all this, they must

function error-free in all kinds of weather. They

are built tough, but they must arrive in shape to

be of any use, and that can be as challenging

as designing and manufacturing them.



M I C R O P E N S I O N M I CRO F I NAN CE

One definite sign of a maturing economy is in the way its people, par-ticularly the poor, save for the future. When

the needs of the present are more or less met, attention turns to securing the future. In that context, micropen-sion has become the new buzzword, and rightly so. It is a flagship scheme of the pension policy think tank Invest India Economic Foundation (IIEF). The term micropension fits its role rather well—small savings through the working years, for comprehen-sive cushioning during retirement.

“An exhaustive survey in 2009 sug-gested that 60 million urban and rural

A growing number of rural and urban poor are waking up to the solid benefits of saving for a secure retirement. BY HEMANT KUMAR.

working poor in India are willing and capable of saving for their old age. Their aggregate annual retirement sav-ing capacity exceeds US$ 4 billion,” Gautam Bhardwaj, Founder-Director of IIEF, told India Now. In 2000, he co-authored the Old Age Social Income Security (OASIS) report for the govern-ment. It has provided the blueprint for India's current pension reform.

“In 2006, a group of pension and development sector experts set up the Invest India Micro Pension Services (IIMPS). Its proprietary micro-pension model encourages the working poor to achieve a dignified retirement through thrift and self-help. It is the only entity in South Asia focussed entirely on

assisting the working poor to save for their old age. Under IIMPS, nearly 200,000 low income workers in rough-ly 100 districts of nine states are already saving an average of INR 100 (US$ 2) per month,” adds Bhardwaj.

IIMPS works with microfinance insti-tutions, cooperatives, worker unions and non-governmental organisations to deliver regulated pension products to the poor. Its key channel partners include the powerful State Bank of India and the Self Employed Women’s Association (SEWA).

The retirement savings of low income workers are channelled to a govern-ment notified fund managed by the UTI Asset Management Company and regulated by the Securities and Exchange Board of India (SEBI). The scheme has delivered a CAGR of more than 12 per cent since its inception in 1994, adds Bhardwaj.

The Government of Rajasthan launched India's first such co-contrib-utory pension scheme for low income informal sector workers in 2008. The State appointed IIMPS as its consultant and turnkey implementation partner for this scheme covering 60,000 peo-ple across all 32 districts of Rajasthan.

Explaining the nuts and bolts of the micropension scheme, Bhardwaj said it works much in the same way as microfinance does. However, it is far more regulated and extremely well-structured. It reaches out to the poor through social uplift networks, sensi-tising and energising them to save for their old age.

“Having understood the impor-tance of a financial safety net, poor daily-wagers have begun putting away money for a rainy day. When they realise that their savings can not only work for them at a time of need, but can actually grow substantially over the years, they give it the seriousness it deserves,” adds Bhardwaj.

IIMPS has started an ambitious pro-gramme of educating rural and urban poor on the benefits of saving for retire-ment, and it is bearing fruit.

MAKINGPennies Count

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Media and entertainment is one of the most progressive sectors today even though

it posted a marginal growth of 1.4 per cent in 2009 over the previous year. That was expected, because it was hit by shrinking advertising budgets owing to the global financial meltdown, and as expected, it made a remarkable comeback last year. A renewed focus on cost efficiencies and on the sustainability of business models, paid off, and the single-digit annual growth rate zoomed to an impressive 11 per cent. From US$ 13 billion, earnings of this industry rose to US$ 14.5 billion. From the looks of it, this good going is just the trailer. The best is yet to come. A KPMG report expects the industry to achieve a growth rate of 13 per cent this year. And the outlook gets better and better – overall, the sector is estimated to log a CAGR of 14 per cent to touch US$ 28.3 billion by 2015.

A behind the scenes look at this success story reveals that the coun-try’s huge and predominantly young consumer base, the ongoing wave of economic growth, and the growing pockets of consumption for regional content are fuelling expansion of the media and entertainment industry. Continuing liberalisation is also estab-lishing an increasingly favourable regulatory framework. In turn, this is unleashing previously unheard of opportunities. Technology advance-ments are playing a part in expanding the industry too, by redefining the

Entertaining a billion plus Indians is good business, finds the media and entertainment industry. BY CHARU BAHRI.

SECTORAL

UPDATEConstruction: The rapidly advancing sector is churning up a hot mix of growth. Pg 29

Engineering: Geared right, the industry is humming solidly. Pg 32

Agro-Food: Lip smacking success is the hallmark of this sector. Pg 35

FEATURES INSIDE

MEDIA & ENTERTAINMENT

SignallingSuccess


M E D I A & E N T E R T A I N M E N T S E C TOR AL U PDATE

products offered, the cost structure and distribution methods of the enter-tainment sector.

Popular choiceTelevision leads among various media channels, accounting for about half of the sectors’ revenues and more than twice the revenues earned by print media, the second highest grosser. In the coming years, the medium is projected to retain the number one position, as growing advertising and subscription revenues will allow it to expand at a CAGR of 16 per cent to touch US$ 14 billion by 2015. During the same period, the KPMG report expects the number of TV households to surge to 156 million. A lot many of these, desirous of better audio quality and sharper picture, will turn to direct-to-home (DTH) technology, taking the net DTH subscriber base beyond the 28 million it had in the last quarter of 2010. Research firm Media Partners Asia goes so far as to say that India will overtake the US and emerge as the world’s largest DTH satellite pay TV market next year, with 36.1 million subscribers. Its Asia Pacific Pay-TV and Broadband Markets 2010 report, proj-ects that the country’s DTH subscriber base will increase more than threefold in this decade, from 17 million in 2009 to 45 million by 2014 and 58 million by 2020. Burgeoning demand has encouraged a number of companies to compete for a share of the pie. A few of these are Dish TV India, Tata Sky, Air-tel Digital TV, and Reliance Big TV.

Buoyed by the growth in cable TV and DTH, the number of private satellite TV channels has also grown exponen-tially in the last decade, from a handful of channels a decade ago, to nearly 400 in 2009. Viewers are now spoilt for choice – 200 entertainment channels and a similar number of news and cur-rent affairs channels jostle for eyeballs and ratings. Sensing the opportunity, a handful of foreign broadcasters have already entered the fray – “Viacom has established a presence in the country

with Colours, Astro has invested in Sun TV while Newscorp has formed a JV with Tata to launch Tata Sky,” notes Rajesh Jain, Head, Media and Entertainment, KPMG India. Large broadcasters, such as the Star TV Net-work, are also looking to gain ground by turning to regional interest chan-nels. Jain points out that Star TV has bought a stake in Asia Net, which has a large presence in south India. Star has also invested in Bengal. Likewise, Zee TV has acquired interests in regional channels.

In future, policy initiatives are expected to strengthen the lead televi-sion enjoys. The digitalisation of cable services by introducing the conditional access system, the head-end in the sky mode of delivery of content to cable operators, the policy on Internet Pro-tocol TV, mobile TV regulatory and licensing issues, and the complete digitalisation of public broadcaster Door-darshan by 2017 are all pos-itive steps. Now, the Tele-com Regulatory Authority of India (TRAI) has also recommended increasing the foreign investment lim-its across the TV, DTH and cable platforms beyond the 49 per cent it stands at (for DTH and cable). Close co-operation between the government, regulatory bodies and industry mem-bers is expected to usher in further reforms that will make this distribution platform even more appealing.

Bold printContrary to western nations where many print publications are slowly going out of circulation, the Indian print industry is surging to new highs. Overall, the sector is expected to clock a CAGR of 10 per cent in the next five years, taking it to nearly US$ 7 billion. This would mark a close to doubling of revenues vis-à-vis 2009, when rev-enues stood at US$ 3.85 billion.

The Indian Readership Survey for the third quarter of 2010, conducted by the

Media Research Users Council in asso-ciation with the research firm Hansa Research Group, showed that the Eng-lish language daily Hindustan Times expanded its readership marginally to 3.5 million. Its rival The Times of India also increased its readership slightly to 7.25 million. Also, the Dainik Jagran, published by Jagran Prakashan, contin-ues to be the most read newspaper in the country, boasting an average issue readership of nearly 16 million.

Regional print publications are expected to outperform pan-India pub-lications. Riding on the back of rising literacy levels, low print media pen-etration, and increasing purchasing power in tier II and tier III cities, they are projected to expand at the higher rate of 12 per cent. “As is happening with the broadcast media, several national players are hopping onto the

regional bandwagon – The Times of India has bought a newspaper in Andhra Pradesh. Meanwhile, regional players that have achieved scale, are now looking to build a national presence. The Hindi lan-guage Rajasthan Patrika is establishing a new pub-

lication in Madhya Pradesh while the Jagran Group acquired Mid-Day, an English language afternoon newspa-per published in Mumbai and Delhi,” observes Jain.

On its part, the government is going all out to encourage foreign direct investment (FDI) as well as competi-tiveness in this sector. It has permitted the publication of the facsimile edition of foreign newspapers and is liberalis-ing FDI norms still further. The print advertisement policy has also been reviewed in favour of small and medi-um and regional language newspapers. Advertising support in monetary terms has been increased from 10 to 15 per cent for small newspapers and from 30 to 35 per cent for medium newspapers, while the mandatory minimum publi-cation period requirement for regional

US$ 2 bnFDI in the in-formation and broadcasting

industrySOURCE: DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION


S E C TOR AL U PDATE M E D I A & E N T E R T A I N M E N T

language newspapers has been reduced from three years to one.

Sure blockbusterSeveral growth drivers are likely to ensure that the Indian film industry, one of the world’s largest with more than 1,000 movie releases annually, sees runaway success in the coming years. With industrialisation mak-ing its way to tier II and tier III cities, more multiplex and digital screens are coming up in these emerging centres resulting in wider releases and higher takings. Pramod Arora, Group Presi-dent and CEO, PVR, observes, “There is a huge appetite for movies across tier I, II and III cities. Considering this trend, our expansion strategy for the coming year encompasses tier II and III cities. We plan to add 13 such cit-ies, like Mysore, Surat, Vijaywada, and Udaipur, to our portfolio. Our low cost cinema model PVR Talkies launched in 2005 was crafted to deliver magical cin-ematic experiences to small town India. We are committed to serving a much larger and wider audience in future.”

Collections from overseas markets are on the rise, thanks to cable and satellite distribution channels while ancillary revenue streams like DTH and digital downloads are also helping producers recover costs. Indian movies are also gaining popularity in the West, especially since a good many of them have entered the Academy Awards and walked away with accolades. Last, but not the least, a liberal policy frame-work allowing 100 per cent FDI in film financing, production, distribution, exhibition, marketing and associated activities under the automatic route will also bode well for this sector.

At the same time, the industry is focussing on offering better content and newer delivery strategies, and to this end, it is investing in research aimed at staying abreast of continually changing customer preferences and media buying habits. Niche sectors are emerging as new ‘local’ target audienc-es, allowing producers the opportunity

to serve more segments. As a result of these initiatives, the industry is estimat-ed to grow from a little less than US$ 2 billion to nearly US$ 3 billion by 2015.

Making wavesRadio holds an undeniable advantage in a country as populous as India. With wide coverage and cost effectiveness on its side, the radio advertising industry is currently worth US$ 193 million as estimated by PricewaterCoopers (PwC). At a projected CAGR of 12.2 per cent, it’s expected to be worth US$ 348 million in 2014. Recent developments include the growth of FM radio, satel-lite radio, and community radio. With the government liberalising its policies for the sector, India’s airwaves are set to get busier, and more melodious.

The growth in radio is one factor spurring the music industry to better performance. Other reasons include the huge telecom subscriber base which is increasing the uptake of mobile value-added services, more live events, and the growing popularity of innovative devices like smartphones and tablets capable of playing digital music. Changes in the music royalty structure are also on the anvil, and likely

to give the music industry a further boost. PwC projects the music sector to log growth rates of 28.6 per cent between 2010 and 2014, growing into a US$ 568 million industry during this time.

Future favourites“Gaming, digital advertising and ani-mation grew at a faster rate last year, and show tremendous potential in the coming years,’” says KPMG’s report. Growing demand for animated content and special effects services, both from domestic and overseas markets is likely to help this segment of the industry cross a billion dollars by 2014.This would represent a whopping growth rate of 18.5 per cent. Players will also look to make the most of opportuni-ties to train talent, convert 2D into 3D formats, develop products, and create intellectual property. Gaming has spec-tacularly bright prospects – it’s project-ed to notch up staggering growth rates of 32 per cent, to touch US$ 714 million by 2014. Console gaming is presently the highest grosser in this sub-sector.

Going forward, mobile gaming is expected to get ahead in the race while casual and active games, 3G based gaming, localised offerings, and ad funded platforms are also expected to garner a healthy share of the pie. Inno-vation is the name of the game in this business since media consumption patterns continuously evolve to keep up with consumers’ demand for formats enhancing the quality of their experi-ence. Realising this, industry players are paying close attention to bringing out new formats to drive revenues by building brand loyalty.

The government has made a sizeable allocation of more than US$ 50 million for the film industry in the ongoing five year plan, part of which will be used to establish a centre of excellence in ani-mation, gaming and visual effects. This is sure to boost the industry too.

Go digital Digital advertising is another avenue with considerable headroom for growth.

KPMG says online advertising will grow at the rate of about 30 per cent annually, establishing itself as the fastest growing advertising medium. In 2009, Google India registered a 96 per cent growth in the number of Google Adwords users.


C O N S T R U C T I O N E Q U I P M E N T S E C TOR AL U PDATE

In this, the comparatively low-cost and wide reaching internet has emerged as a much-favoured digital platform, even by small and medium enterprises.

Google India alone saw a 96 per cent annual growth in 2009 in the number of Google Adwords users. According to KPMG, online advertising will grow about 30 per cent per annum, establishing itself as the fastest growing advertising

medium. Here as well, regional advertising can look forward to a business boost as new sectors like education, hospitality, jewellery and real estate turn to local channels to build loyalty to their local brands.

Government endeavours pave the way forward for digital media. The Information and Broadcasting Ministry has rolled out a roadmap towards complete digitalisation in response to

which TRAI has suggested covering the entire country in three stages, tier I cities by 2013, tier II cities by 2014 and tier III cities by 2017.

It may be called the fourth estate, but the media, coupled with the entertainment industry, is growing from strength to strength. As far as performance goes, at least, it seems it would like to be known as the number one sector.

The changing skyline of Indian cities is reflective of the country’s booming economy. Progress is seen not only in the greater

number of high-rises and the subur-ban sprawl, but also in infrastructure capacity enhancements, the backbone of a growing economy. So too, it’s marked by increasing demand for construction equipment, the means to build a new, resurgent India.

Infrastructure expansion plans are the key to sustaining the momen-tum of growth. As these projects are rolled out, demand for construction equipment rises. The two go hand in hand. Not surprisingly, the govern-ments’ plan to almost double its infra-structure expenditure in the twelfth five year plan, starting next year, augurs well for the industry.

“Government spending on infrastructure is expected to touch a trillion dollars over the next five year plan period. Road construction, ports, airports, metro rail, sanitation,

irrigation, and power projects are being rolled out faster than ever before,” observes M M Shahane, executive vice president and COO, Engineering Products and Services Business Group, Voltas. Consequently, Shahane expects the demand for construction equipment to grow by 15 to 20 per cent across all segments – earth-moving, material-handling

CONSTRUCTION

Equipping IndiaWith the power to lever up the economy as a whole, the construction equipment sector is poised for major expansion. BY CHARU BAHRI.

30 APRIL -MAY 2011 www.ibef.org

S E C TOR AL U PDATE C O N S T R U C T I O N E Q U I P M E N T

and lifting, concrete and road-building equipment – in the coming years.

Entry pointBurgeoning opportunities are changing the structure of the industry. Earlier, the market used to be dominated by a handful of public limited and a few private limited companies or joint ven-tures (JVs) between local companies and their overseas principals. Now, the increasing number of infrastructure proj-ects being awarded has encouraged inter-national majors to directly compete for a share of the market. Atlas Copco, Car-gotec, Caterpillar, Casagrande, JCB, Lieb-herr, Liugong, MAIT, Manitowoc, Sand-vik, Terex, and Volvo CE are just some of the global brands jostling homegrown players like BEML, Escorts, Gujarat Apol-lo, and Telcon, to name a few.

Some overseas companies are entering the country solo. Others are entering into JVs with established local providers to benefit from their understanding of the domestic market and existing distribution networks. For instance, TIL Limited, a major player in the Indian infrastructure space, has been a dealer for global leader Caterpil-lar for over six decades. R Nandagopal, vice president, Equipment & Project Solutions, TIL Limited says he believes that tie-ups with leading overseas brands bode well for the construction equipment industry – “In the absence of indigenously developed domestic brands, JVs make technology easily available. It makes more sense to use technology off-the-shelf than trying to reinvent the wheel. After all, the mech-anisation of construction in India has taken off in a big way in just the last few decades. In this time, the technolo-gies used in construction equipment have developed well, overseas and for-tunately, major brands were interested in tapping into the potential of the Indian market.”

Acquisitions of local companies by foreign majors also reflect the active interest of global construction equip-ment vendors in the Indian market.

In 2008, Volvo CE India’s acquisition of Ingersoll Rand’s road machinery division established its manufactur-ing footprint in the country. This Bengaluru based road machinery manufacturing facility caters both to the domestic and export markets. More recently, CNH Global NV, a global leader in the agricultural and construction equipment industry, fully acquired L&T –CASE Equipment Private Limited, a joint venture estab-lished in 1999 to manufacture and sell construction and building equip-ment in India, and renamed the busi-ness Case New Holland Construction Equipment India Private Limited.

Going localGiven the promising outlook for the construction sector, almost every new entrant is clocking encouraging growth rates. But overseas companies are also realising the need to estab-lish manufacturing facilities in the country to compete with local vendors on price. As a result, an increasing number of players are moving from

importing equipment in a semi or complete-knocked down condition to setting up a full-fledged presence in India, factories included.

LiuGong equipment, for instance, has been sold and serviced in India since 2003. But the company only opened an office and spare parts ware-house four years later, after testing the Indian waters. The next step was com-missioning an earth-moving equip-ment manufacturing facility in Indore. Wirtgen India has established a green field production centre in Pune at the cost of US$ 12 million to manufacture Hamm vibratory rollers. According to Ramesh Palagiri, CEO & managing director, Wirtgen India, “We’ve been able to source all the necessary compo-nents other than hydraulic parts from India itself. It helps that the Indian industry has matured to this extent.”

JCB India, an industry stalwart, has established an enviable dealer network since it first entered the country in 1979. Its long innings has also helped it bag prestigious clients and under-stand the pulse of the Indian market. Consequently, the company was one of few to make a sizeable investment of about US$ 67 million to expand its backhoe loader factory during the slowdown, to make it technologi-cally advanced and the worlds’ largest backhoe loader plant. “Since we were upbeat about the prospects of the industry, we prepared ourselves for the ensuing upswing,” says Amit Gossain, vice president, Marketing & Business Development, JCB India. More recent-ly, the company has established a plant producing loading shovels, track exca-vators, and compaction equipment at a cost of about US$ 33 million, and a com-ponents facility costing another US$ 26 million, both in Pune, Maharashtra.

Sound footingSeveral government initiatives are encouraging a steady stream of global EPC contractors into construction and development projects. Such projects may receive 100 per cent FDI, as a

Trends in demand for construction equipment

Stimulus spending in India saw the country’s

construction equipment market grow 45 per

cent, to nearly 60,000 units last year. This year,

the Indian market is expected to log a growth of

more than 19 per cent. It is estimated to grow to

110,000 units by 2015.

Changing structure of global demand for con-

struction equipment: India’s growing share

In 2004: 2 per cent

In 2009: 5 per cent

In 2013: 7 per cent (projected)

India sales forecasts for 2013

Backhoe loaders: 25,000

Crawler excavators: 19,000

Wheeled loaders: 4,200

Dump trucks: 1,100

Compaction equipment: 4,500

Mobile cranes: 11,000

SOURCE: OFF-HIGHWAY RESEARCH (INTERNATIONAL MANAGE-MENT CONSULTANCY FIRM)

31www.ibef.org APRIL -MAY 2011

C O N S T R U C T I O N E Q U I P M E N T S E C TOR AL U PDATE

lump sum payment of up to US$ 2 mil-lion under the automatic route or 5 per cent royalty on domestic sales and 8 per cent on exports. Also, the tariff protection on capital goods has been removed and customs duties on several kinds of equip-ment have been reduced. Equally encour-aging are the ready availability of qualified engineers in the country and the low cost of skilled labour.

Alongside contractors, construction equipment majors also see the cur-rent economic climate as favourable to investing in the country. “Volvo CE has a clear objective of supporting cus-tomers in the growing BRIC (Brazil, Russia, India, and China) markets. India is strategically very important for us. Last year, we announced a strategic investment of about US$ 20 million in an Indian excavator producing facil-ity. Thanks to a stable government and strongly growing economy, we have considerable confidence in being able to make a strong contribution to the coun-try’s ambitious infrastructure and road building plans,” says A M Muralidharan, managing director, Volvo India.

Beneficial spin-offsInward investments are beneficial for the construction equipment sector as they bring newer technologies, equipment designs, and production methods into the country. To cite an example, CNH Global NV’s newly-acquired state-of-the-art facility at Pithampur in Madhya Pradesh makes backhoe loaders and vibratory com-pactors. Still, to be integrated into the CNH manufacturing network, the plant will need to introduce world-class production methodologies to conform to the CNH Production Sys-tem and Quality Standards.

Technology transfers are also facili-tated by arrangements where Indian players are granted manufacturing licenses by major global brands. For instance, TIL Limited’s manufactur-ing division has associated with world leaders like Manitowoc, Grove, Potain, Astec Inc, Paceco Corp and Hyster for

the manufacture and marketing of a comprehensive range of cutting-edge material-handling equipment, and port and road building solutions.

High end technology in turn helps enhance equipment reliability, safety, its service life and productivity as well as helps optimise fuel efficiency. Greener equipment furthers the message of sustainable development across the industry. Volvo CE India recently announced the launch of Volvo REMAN to encourage its clients to renovate used components at a lower cost instead of buying new parts. Consuming fewer materials and ener-gy is seen as a more eco-friendly way of working. Volvo’s wide-ranging solu-tions also deliver fuel efficiency across all elements of its machines, whether engines or systems. TIL Limited has also commissioned a 50,000 sq ft state-of-the-art Component Rebuild Centre to provide major component rebuilds, to serve customers by reduc-ing owning and operating costs and the downtime of machines.

As global brands make inroads into the market, domestic players are being spurred to invest in modernising their production facilities, adopt new tech-

nologies, and focus on R&D to match global quality standards. According to Shahane, “Imported construction equipment has an edge over locally manufactured machinery. It scores higher on quality, electronic controls, technology, and aesthetics and ergo-nomics.” Consequently, local players are trying to enhance their offerings by introducing models including bet-ter controls and improved aesthetics and ergonomics. Voltas, for instance, is aware of the need to innovate and stay abreast of the competition and is working on improving its screening plants, cranes and other products to reflect international standards.

Export potentialIndia’s competitiveness as a produc-tion centre is encouraging some for-eign companies to set up more capac-ity than they anticipate as essential to meet the domestic demand, and use the excess to serve a wider geographi-cal region beyond the country. Terex, a fairly recent entrant into the market, counts India, China and Brazil as its three fastest growing regions. Not sur-prisingly, it has plans to make its India factories export hubs. Emerging econ-omies already yield one-third of the company’s business, and are expected to account for close to half its business in the future. As a result, Terex has commissioned a production line for cranes in Hosur, Karnataka, expand-ing beyond crushers, and a factory in Noida, Uttar Pradesh, near capital New Delhi, to make backhoe loaders and develop smaller and cheaper loaders for emerging markets. JCB is also exporting to countries in the SAARC region.

An increasing number of players are moving from importing equipment to setting up a full-fledged presence in India, factories included.

“We’ve been able to source all the necessary components... from India itself. It helps that the Indian industry has matured to this extent ”—Ramesh Palagiri,CEO, Wirtgen India

32 APRIL -MAY 2011 www.ibef.org

S E C TOR AL U PDATE E N G I N E E R I N G G O O D S

Whether foreign or domestic brands, players who are better aware of con-tractors’ expectations from construc-tion equipment are more likely to succeed. Indian contractors tend to prefer brands associated with a higher resale value, sturdier engines, prompt after-sales services, financing options, and the willingness to promote new technologies. Versatile machines are also in demand, and to this end, some companies are devising machines that may be used for multiple applications by changing attachments. Contrac-tors working round-the-clock shifts to meet tight project deadlines also prefer rugged, low-maintenance equipment designed to withstand extended usage. Essentially, adaptation and offering

value for money solutions is the key to success in Indian conditions.

Some of the obvious spin-offs of a rapidly expanding construction equip-ment market are greater demand for components and support services. A number of vendors are also focussing on operator training, which is critical to onsite safety and productivity. Escorts Construction Equipment Limited has launched a Joint Certification Program in partnership with the Construction Industry Development Council, a body established by the Planning Com-mission, to train workers in the infra-structure sector. Its training school in Bengaluru, Karnataka, can train 200 individuals at a time. Escorts has also partnered with skill development firm

MITCON, to train workers in operating and maintaining equipment.

According to management consultan-cy firm Off-Highway Research, India is already the third largest equipment market in the world, behind China and the US. Now privately held, Off-High-way Research was set up twenty years ago as part of the Economist Intelli-gence Unit of the world famous news magazine The Economist.

The prospects for the construction equipment sector are bright, no doubt, but these will be better tapped by com-panies who see themselves as “part of the Indian growth story,” to quote Volvo’s Muralidharan. They will profit from equipping India for the ensuing waves of expansion.

The Indian engineering goods sector is the cor-nerstone of the country’s economy. Taken together, its two major segments,

heavy engineering and light engineer-ing, account for the bulk of the produc-tion of engineering goods in India.

True to its name, heavy engineer-ing occupies more than 80 per cent of the industry. This segment makes capital goods for sectors counted as the backbone of the economy, such as the power, cement, steel, petrochemicals and mining sectors. For this reason, it is believed to shoulder the operation and expansion of nation-building sec-tors. It also produces machinery for cotton textile units, sugar mills, and much of the needs of the transport sec-

ENGINEERING GOODS

Strong CurrentsThe engineering goods sector is gaining from taking up the mantle of serving other sectors of the economy and the world at large. BY CHARU BAHRI.

33www.ibef.org APRIL -MAY 2011

E N G I N E E R I N G G O O D S S E C TOR AL U PDATE

tor, such as diesel engines, tractors, and vehicles, especially the world-renowned small car Tata Nano.

The light engineering goods sector is highly diversified. At one end, it produces highly sophisticated and technology intensive microproces-sor-based process control equipment and diagnostic medical instruments. At the other, its sub-sectors like cast-ings, forgings, and fasteners have a lower entry barrier as these are less capital and technology intensive. By and large, the light engineering indus-try produces inputs for the capital goods industry.

Bright prospectsThe fortune of the engineering sec-tor is linked to the performance of the key end-user industries consuming its products. At present, power utilities are at the forefront of these. Government initiatives to increase power genera-tion and strengthen and expand the power distribution infrastructure have brightened the prospects for the boiler, turbine, and transformer sub-sectors. The government’s thrust on infrastruc-ture development is also sustaining the engineering industry in a big way. Units manufacturing cement, steel, material-handling and mining machin-ery, for instance, will continue to benefit in view of the significant invest-ments proposed to be made by the gov-ernment in the next five years.

Verticals such as the automotive, refinery, pumps and motors, and tex-tile industries that are more directly linked with individual consumers are making major gains from changes in the demographic profile of the Indian market that are spurring demand. Higher disposable incomes and the greater willingness to spend on prod-ucts associated with societal upward mobility and better lifestyles, both outcomes of increasing urbanisation, are driving consumption levels. This in turn is expanding the opportunities for engineering companies manufacturing products serving these verticals.

Several pointed government initia-tives are also having a positive impact on the engineering sector. These include the creation of an SEZ policy and the development of an industrial corridor, both of which are aimed at attracting further investments in engi-neering goods manufacturing facilities. The elimination of tariff protection on capital goods, the delicensing of the heavy electrical industry and allowing 100 per cent foreign direct investment, the reduction of custom duties on various equipments, and incentives for R&D are also helping establish an environment that is conducive to the growth of the sector.

According to M S Unnikrishnan, MD and CEO, Thermax Limited, “The fact that the Indian economy will continue to grow at 9 to 10 per cent for several years in the foreseeable future; the tre-mendous scope for capital goods and infrastructure sectors to grow; and the increasing pace of the reality of urbani-sation will stimulate the country’s engi-neering sector to provide goods and services to both the traditional industry and to growing commercial establish-ments. We are in a phase where eco-nomic growth is being challenged and moulded by issues related to climate change, efficiency of operations and

innovation-breakthroughs. These addi-tional factors will also trigger opportu-nities for sustained growth for India’s engineering sector.”

Exporting successIn 2009, the US and EU accounted for 37 per cent of India’s total engineering exports. Since then, exporters looking to de-risk business after facing major contractions in demand in these tradi-tional markets during the slowdown are exploring newer markets demanding better priced quality products. Eventu-ally, geographical diversification would also help grow exports.

Now, the spotlight is on regions like Africa, Latin America, South America, the Middle East, and south-east Asia. R Maitra, executive director, EEPC India, cites the growth in the global trade in engineering goods and services, par-ticularly in regions like Latin America, ASEAN, Middle East and CIS coun-tries, as a key driver of engineering exports. EEPC was the lead agency for The India Show in Turkey, where the focus was on engineering exports

“Other plus points that are driving engineering exports are the overall expansion of the Indian engineering industry, particularly its ability to man-ufacture high value added engineering

Sub-Sectors of the Engineering Industry

SOURCE: CORPORATE CATALYST INDIA’S REPORT ON INDIAN ENGINEERING SECTOR

HEAVY ELECTRICAL INDUSTRY

Turbines and generator sets

Boilers

Transformers

Shunting locomotives

Electrical furnaces

Switchgear and control gear

HEAVY NON ELECTRICAL

INDUSTRY

Dairy machinery

Mining machinery

Metallurgical machinery

Oil-field equipment

Material-handling equipment

Rubber machinery

Sugar machinery

Cement machinery

Textile machinery

Machine tools

LIGHT ENGINEERING INDUSTRY

Medical and surgical instruments

Process control instruments

Antifriction roller bearings

Industrial fasteners

Ferrous castings

Steel forgings

Seamless steel pipes and tubes

Electrical resistance welded steel pipes

and tubes

Submerged arc-welded saw pipes

Typewriters

Bicycles

Sewing machines

Plain paper copiers


S E C TOR AL U PDATE E N G I N E E R I N G G O O D S

goods and services; the lowering of transaction costs in exporting from India; and the country’s progressive foreign trade policy,” adds Maitra.

Rapid expansion of the technical education and training infrastructure is also spurring the industry. The ready availability of graduate engineers, trained technicians, and unskilled labour at a lower cost than developed countries and some other developing countries is doing its bit to make India a preferred outsourcing destination. The country’s rich deposits of ferrous and non-ferrous metals such as mild steel and aluminium is seen as a plus point as well. Since raw materials account for close to half of the operating costs of the engineering industry, companies based in India gain a major cost advantage.

The scope for engineering exports to grow is immense. An Ernst & Young strategy paper released last year saw the potential for Indian engineering exports to grow three-fold to US$ 110 billion by 2014. This would entail annual growth rates of 22 to 25 per cent and maintaining the share of engineering exports at about 22 per cent of the total exports.

A KPMG and Confederation of Indian Industry report, Resilience and Renewal – Engineering Sector Looks Ahead, suggests that availing inter-national certification for engineering products and participating in interna-tional exhibitions would help make inroads into overseas markets.

Frugal engineeringAccording to Maitra, “Frugal engineer-ing is another avenue with immense potential. It is gaining ground in the auto sector and in the Engineering Process Outsourcing (EPO) segment. In future, new and emerging sectors like defence, renewable energy and pos-sibly even nuclear energy could offer similar opportunities.”

The aforementioned report, Resil-ience and Renewal – Engineering Sector Looks Ahead, cites frugal engi-neering, that is, the ability to devise

competitive, lean engineering solu-tions, as holding the potential to open up a new revenue channel as well as helping to utilise idle capacity and developing new technology through global support. The concept of out-sourcing research and development (R&D) is growing more popular as innovation is increasingly produced collaboratively with inputs from suppli-ers and clients.

Externalising R&D helps gain from cost sharing and leveraging potential economies of scale. But for this to hap-pen, Indian companies must focus on further enhancing their in-house design and product development abilities and R&D project management skills. They must also open up to the idea of differentiating themselves from the competition by spending more on R&D. Historically, the aggregate domestic R&D spending has never exceeded 1 per cent of GDP.

Last year, India spent 0.9 per cent of its GDP on R&D against USA's 2.85 per cent and Japan's 3.41 per cent. So far, R&D spending is dominated by the public sector (it accounts for 75 to 80 per cent of the total expenditure), pos-sibly because public sector enterprises play an important role in the country’s heavy engineering sector.

Service offeringsInnovative engineering companies are taking to offering solutions instead of only core products to widen their cli-ent base, both at home and overseas by way of engineering process outsourc-ing (EPO). Solutions typically include

add-on services such as design services, project management services, opera-tions support, and after-sales services.

A.F. Ferguson & Co. estimates put the demand for Indian EPO services at about US$ 12 billon last year, represent-ing a share of 15 to 18 per cent. This share is projected to increase to about 18 to 22 per cent by 2015, to take the sector to US$ 25 to 30 billion. Electron-ics and telecom services account for one-third of the country’s total EPO market. The share of the automotive sector is around 11 per cent while anoth-er 8 per cent comes from the industrial construction and utilities sectors.

Other beneficiaries are the ship build-ing engineering, civil constructions, heavy engineering, mining, chemical engineer-ing, metallurgy, food & consumer dura-bles, agriculture and textiles. “In time, as the industry takes on more complex activities, the average revenue generated by this sector of the industry is expected to rise,” opines Maitra.

A report by Corporate Catalyst India says the EPO market in India has the potential to exceed US$ 40 billion by 2020. Concerted efforts by all the key stakeholders – the Government, aca-demic institutions, service providers and trade bodies – would help achieve this by boosting investments in infrastructure and improving marketing efforts.

Automating processesAutomation has a close association with the engineering sector. On the one hand, it is widening the scope of the engineering sector. ABB, for instance, the global leader in power and automation technologies, gives equal importance to both its revenue streams, though its automation product-related businesses tend to drive the short cycle while its project-related businesses have longer gestation periods. “We are seeing considerable demand for automation products from SMEs, engineering and ancillary industries where we provide products and solutions such as drives, motors, robots and accessories. The revival and growth of the industrial sector

Engineering Exports

January 2011 alone: US$ 36.5 billion.

April 2010-January 2011: US$ 184.6 billion, 30

per cent growth over the same period last fiscal.

Key export sectors: Heavy engineering goods,

transport equipment, capital goods, other

machinery/equipment and light engineering

products like castings, forgings and fasteners.

SOURCE: EEPC INDIA EXPORT PERFORMANCE MONITOR


A G R O - F O O D S E C TOR AL U PDATE

is generating demand for control systems, automa-tion solutions aimed at making the metals, min-ing, and mineral sectors more energy efficient. Thanks to the growing Indian economy and con-siderable investment in all sectors, we find ourselves in a sweet spot as our cus-tomers need both power and automation and we are in a position to address both of these needs,” says Juliane Lenzner, VP, Corporate Communications & Investor Relations, ABB Limited.

On the other hand, automation allows engineering establishments to improve their operations by enhancing

productivity and making do with lim-ited resources, thereby improving variable cost structures. Automation also helps companies to differentiate them-selves from the compe-tition and scale quickly unconstrained by supply of semiskilled

manual labour.ABB itself uses automation products

at its own facility to improve efficiency and provide high quality products to its customers.

Intensifying competition is likely to encourage more Indian players to focus on upgrading their technology base

and make process improvements to enhance productivity levels and grow more competitive.

This would perk up the scope for automation products. Companies are also growing more quality conscious and acquiring certifications like ISO 9000 accreditation to show their com-mitment to higher standards. Last, but not the least, Indian engineering companies are emphasising product innovation in a big way, and foster-ing a culture of innovation has gained centre-stage among many players.

Beyond doubt, power moves would help the Indian engineering sec-tor grow to the next level and come under the spotlight for all the right reasons.

US$ 30 bnProjected size

of India's engineer-ing process out-

sourcing industry by 2015

With no less than 52 per cent of the country’s land being cultivable, close to five times

the world average of 11 per cent, it comes as no surprise that the Indian agro-food processing industry has a lot going for it. In real terms, this trans-lates into a staggering 161 million hect-ares of gross cropped area, the second highest in the world, yielding a large variety of agro produce around the year. Of this, 55mn is irrigated land, the most any country has. Consequently, India holds a place among the top five producers of every key agricultural cate-gory – pulses, tea, sugarcane, fruits and vegetables, rice, oilseeds and coarse

AGRO-FOOD

Blossoming FortunesPositive developments in the Indian agro food processing sector are cooking up a success story many will want to savour. BY CHARU BAHRI.

SOURCE: REPORT BY A F FERGUSON & CO.


S E C TOR AL U PDATE A G R O - F O O D

grains. All told, India is the second-largest producer of agro-products.

In spite of these achievements, there is a clear mismatch between the agri-cultural yield and the percentage of the produce that makes its way to process-ing units. According to figures put out by the Agricultural and Processed Food Products Export Development Authority, India processes merely 2.2 per cent of its agro produce, one-tenth of what neighbouring China processes. Brazil processes 70 per cent and the US processes 65 per cent of its yield. India’s performance is better in the dairy sector – around 35 per cent of the milk production is processed. Compar-ing the statistics across all segments, Shushmul Maheshwari, CEO, RNCOS, a research organisation, points out that India processes only 7 per cent of its produce compared to 30 per cent achieved by Thailand, another develop-ing country. Therefore, the sector has immense potential to grow, especially considering the country’s burgeoning population and its rapidly changing demographic profile.

Favourable demographicsAn Ernst & Young report, Flavour of Incredible India, cites food as the big-gest consumption category in India. At the individual level, food constitutes about 30 per cent of the consumer wal-let. Overall, the spending on food tots up to about one-fifth of the country’s GDP. As much as 70 percent of this is on agro-products. But only about one-fifth is spent on secondary value-added processed products and just over one-fourth on tertiary value-added pro-cessed products.

India is fast moving towards a socio-economic environment demanding a higher proportion of agro processed foods and desirous of reducing the huge wast-age of seasonal agro commodities. Rapid urbanisation is increasing the number of nuclear families living in cities and women joining the workforce. Together, these factors are widening the domestic market for processed agro foods.

“End-use markets such as the FMCG and the pharmaceutical formulations sectors are both growing at 12 to 15 per cent and driving the demand for pro-cessed foods directly catering to these sectors,” observes Natasha D’Costa, Industry Analyst, South Asia and Middle East, Chemicals, Materials and Food Practice, Frost & Sullivan.

Dr S L Rahman, joint secretary of the Agri-Horticultural Society of India, believes there is also ample scope to increase the uptake of health-promoting processed foodstuffs – “Processed foods containing bioactive food compounds such as polyphenols, phytosterols, carotenoids, and so on, are good for health as these ingredients are known to reduce the risk of acquiring certain diseases. Publicising these benefits will further enhance social acceptance for processed agro foods which are available all year round.”

Destination IndiaMultinational corporations reading the signals are making well-timed, calculated entries into the Indian market. Pillsbury, for instance, has identified whole wheat flour as its key

world (in volume terms) because of launching smaller pack sizes aimed at attracting rural consumers at the lower end of the consumption pyramid.

Since customising offerings to suit the domestic market is vital for suc-cess, both newer entrants and estab-lished players are focusing as much on establishing research and develop-ment (R&D) facilities as on expanding their manufacturing footprint. Last year, FieldFresh Foods, a joint venture of Bharti Enterprises and Del Monte Pacific Ltd, commissioned a state-of-the-art R&D and manufacturing facility at Hosur, at an initial investment of over US$ 25 million. In a first of sorts, the facility will produce fruit drinks as well as culinary products like ketchups, sauces, mustard and mayonnaise under the label Del Monte. The culinary products would be packaged in various options. Nestle also plans to invest US$ 50.49 million to set up its first Indian R&D centre at Manesar by next year.

Buhler India, which has installed over 200 complete rice mills since starting operations in the country in 1991, is work-ing on customising its offerings to pro-vide solutions better suited to the Indian climate for grain management. It plans to more than double its turnover to US$ 225 million turnover by 2014.

Better infrastructureForeign direct investment in food processing was expected to increase 27 per cent last year, to US$ 264.6 million. The Government envisages attracting investment of US$ 21.9 billion in the sector over the next five years. A major chunk of this is expected to come from the private sector and financial institutions.

By adding the maximum possible value to India’s produce, this sector holds the potential to expand the entire agro-based economy to the next level.

What used to be a small scale indus-try is poised to metamorphose into a competitive modern sector worth many times more, much like the raw produce it processes into value added edibles.

Domestic Food Spending

Current level: US$ 181 billion

Of this, spending on tertiary value-added pro-

cessed products: US$ 47 billion (26 per cent)

Forecast for 2015: US$ 258 billion

Forecast for 2020: US$ 318 billion

CAGR: 4.8 per cent

SOURCE: ERNST & YOUNG REPORT 'FLAVOUR OF INCREDIBLE INDIA'

product instead of refined baking flour, in keeping with the local preference for whole wheat flour. Today, the brand has a revenue base of over US$ 17 million. Likewise, Frito-lay introduced potato chip pack sizes priced at just 10 cents to target price-sensitive Indian consumers. And homegrown biscuit major Parle-G has emerged as the largest-selling biscuit company in the


More than three quarters of a century ago, Mahatma Gandhi turned a wheel and spun a revolution so powerful that it drove the British out of India. Independent India picked up Gandhi’s momentum and spawned a thriving rural industry out of khadi. Enter the Khadi and Village Industries Commission (KVIC), a

statutory organisation, promoting and developing khadi and village industries. It is administered by the Agro & Rural Industry (ARI) Division of the Ministry of Micro, Small and Medium Enterprises (MSME).

KVIC plans, promotes, organises and implements programmes for the develop-ment of khadi and village industries. It is also charged with the responsibility of

building reserves of raw materials and implements so that they can be sup-plied to producers. Its socio-economic charter has set the goal of generating sustainable rural nonfarm employment opportunities at low per capita invest-ment. It undertakes skill improvement, transfer of technology, research and development, and marketing and helps in generating employment opportuni-

TRIUMPHIndia’s own industrial giant with the mind of an industry and the heart of a missionary executes its socio-economic charter. BY RUCHIRA MITTAL.

HOMESPUN

K V I C M AD E I N I N D IAP

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: K

VIC


M AD E I N I N D IA K V I C

The Ministry of

Micro, Small and

Medium Enterprises

MSME is implement-

ing a scheme of Fund

for Regeneration of

Traditional Indus-

tries (SFURTI) for

developing nearly

100 khadi and village

industry clusters. At

a cost of nearly INR

100 crore (US$ 22.5

million), the scheme

will reach completion

later this year. It is

meant to make khadi

and village industries

more productive and

competitive and ac-

celerate the pace of

rural employment.

"SFURTI should establish a

regenerated, holistic, sustainable

and replicable model of integrated

cluster-based development,” says

J S Mishra, CEO, Khadi and VIllage

Industries Commission (KVIC). “It is

the first organised and systematic

attempt at introducing cluster based

development in the sector. Out of

105 clusters to be developed under

SFURTI, this year’s target is to effect

the change in 72 clusters, benefit-

ting more than 40,000 artisans. The

average earnings of artisans have in-

creased by 40 to 60 per cent in such

clusters,” says a beaming Mishra.

The commission’s socially-

motivated interest subsidy eligibility

certificate (ISEC) scheme serves as an

important mechanism for funding the

khadi programme. It mobilises credit

at a concessional rate of four per cent

from banks to fill the gap between

what an entrepreneur needs and what

is actually available. The commission

compensates the bank for the differ-

ence between the actual lending rate

and 4 per cent.

In 2002, KVIC introduced its product

development, design intervention

and packaging (PRODIP) scheme to

improve the quality of khadi products

and also to diversify into new ones. It

aims to make khadi more marketable

by establishing quality control labo-

ratories, installing better machines,

packaging products more efficiently,

training workers and engaging ex-

perts to design newer products.

In 2003, the commission launched

its highly popular group insurance

scheme for khadi artisans. Called

Khadi Karigar Janashree Bima Yojana

(JBY), the Life Insurance Corpora-

tion of India (LIC) scheme requires an

annual premium of INR 100 (US$ 2)

per beneficiary. The commission has

so far covered 280,000 khadi artisans

under this scheme.

ties in rural areas. This helps check villagers’ migration to cities in search of jobs.

The commission plans and organises training for khadi workers and artisans, stores raw materials and implements for the production of handspun yarn, encourages khadi and village enterprise, and helps sell the produce. Apart from aiding research and develop-ment, the commission also helps arrange the capital and funds to set up and run khadi and village units.“KVIC’s programmes are implemented through the

Khadi and Village Industries Boards of each state,” says the commission's CEO, J S Mishra.

The commission uses a network of 5,000 regis-tered institutions and more than 30,000 cooperative societies, banks and financial institutions. KVIC is also the nodal agency for implementing the ambi-tious Prime Minister’s Employment Generation Pro-gramme (PMEGP), for rural entrepreneurs. PMEGP is an employment generation credit linked subsidy scheme for the rural sector. In 2008, the government introduced PMEGP to create more jobs nationwide. The scheme has a plan outlay of INR 4,735 core (US$ 1 billion). This includes INR 250 crore (US$ 56 mil-lion) for backward and forward linkages to generate an estimated 3.7 million new employment opportunities by next year.“PMEGP has emerged as one of the pioneering cam-

paigns. It helps set up micro projects that need invest-ments of a maximum of INR 2.5 million (US$ 56,320) and use locally available raw material and skills. As the nodal agency for the programme, KVIC has sanctioned 100,000 such projects that will help employ nearly a million people,” says Mishra.

The commission’s programmes cover hand spun and hand woven cotton, woollen, muslin and silk variet-ies. The seven categories of industries it promotes are mineral based, forest based, agro-and-food processing based, polymer and chemical based, rural engineer-ing and bio-technology based, hand made paper and fibre, and the service industry. Together, the industries under KVIC's umbrella, produce the trademark khadi fabric and products made from it, processed fruit and vegetable products, honey products, paper and leather products, pottery, palm sugar and its products, herbal oil, incence and match sticks, soaps, processed cereal and pulses, and products of rural engineering.

Mishra, an officer of the elite Indian Administrative Service (IAS), says: “In 2009-10, KVIC’s budget alloca-tion was INR 1,260 crore (US$ 284 million). Despite the global economic slowdown, the sector registered a growth of nearly four per cent in 2008-09. The khadi and village industry production in 2009-2010 was nearly INR 12,216 crore (US$ 2.75 billion). Beating the

Working With Responsibility


K V I C M AD E I N I N D IA

odds, the sector employed a little more than 10 million people in 2009, higher than in the previous year.”

About the commission's route map for the future, Mishra says: “During the eleventh Five Year Plan, KVIC is expected to grow at 15 per cent and by the end of the twelfth plan, it aims to be an INR 27,000 crore (US$ 6 billion)enterprise employing more than 14 mil-lion people.”

To improve the quality of khadi, the commission works closely with the National Institute of Design (NID), Ahmedabad; the non-profit trust Dasta-kar, Andhra Pradesh; Indian Institute of Technology (IIT), Delhi and the Tex-tiles Committee, Mumbai.

One of KVIC’s biggest customers is the Indian Railways. It bulk buys items like bed rolls, curtains, pillow covers,

“kulhars” (earthen cups) for its canteens and thousands of trains. Other gov-ernment departments also buy dasuti khadi, dungari cloth, dusters, long cloth, bunting cloth and sheeting cloth from the commission.

Khadi is the pride of the nation and this can easily be seen in the decision of the Bureau of Indian Standards that it will be the only fabric to be used for producing the National Flag.

The commission’s social responsibil-ity makes it work like an industry and think like an NGO. Two of its major schemes fall into this category. The first, the workshed scheme gives assis-tance for raising worksheds for khadi artisans so that they have a better work

“In spite of the global economic slowdown, the sector registered a growth of nearly four per cent in 2008-09”—J S Mishra, CEO, Khadi and Village Industries Commission (KVIC)

environment. The second is for raising the competitiveness of khadi industries and artisans. It has given assistance to 200 khadi institutions in order to make the industry market-driven and profit-oriented, by replacing their obso-lete machinery and equipment. “This blends well with one of KVIC’s main objectives of creating self-reliance amongst people and building a strong rural community spirit,” adds Mishra.

The commission signed an agree-ment with the Asian Development Bank (ADB) last year, for a US$ 150 million loan over a three-year period for a comprehensive khadi reform programme. It will bolster the sustain-ability of the khadi sector by increasing incomes for spinners and weavers, gen-erating more employment, raising the welfare packages of rural artisans and by gradually enabling khadi institu-tions to stand on their own feet.

Using the loan, the commission has developed its very own ‘Khadi Mark’ for positioning khadi as a genuine, guaran-teed hand spun and hand woven cloth. The mark has been designed by NID. Using the Khadi Mark, the commission will monitor, authenticate and enforce the genuineness of the khadi products.

In 2009, KVIC rolled out a scheme to strengthen its marketing effort by reno-vating 30 selected khadi sales outlets and helping renovate 100 more such outlets nationwide.

In order to strengthen the research and development activities in khadi and village industries, the commis-

sion has established the Mahatma Gandhi Institute for Rural Indus-trialization (MGIRI) at Wardha in rural Maharashtra. For setting up this national level institute, the com-mission collaborated with IIT Delhi by revamping the erstwhile Jamnalal Bajaj Central Research Institute.

The khadi and village industry model has come of age. Micro, small and medium enterprises have a major share of production and exports, largely through khadi and village enterprises that generate employment opportuni-ties for large numbers of people. Their effective, efficient, flexible and innova-tive entrepreneurial spirit gives them their unique position in the economy.

A recent month-long Khadi Utsav (festival) held in Ahmedabad became a runaway commercial success. The March-to-April festival-cum-exhibition also had a first-of-its-kind buyer-seller meet. The exhibition attracted hun-dreds of vendors selling khadi-only products, and was KVIC’s platform for showcasing brand Khadi.

AD Choudhary, KVIC director told reporters in Ahmedabad, “Khadi has a tough time competing with the other textile industries as this is a highly labour driven industry, where the labour cost exceeds the machinery itself. Still, the subsidies provided by state and central agencies have helped the industry.”

Homespun and steeped in tradi-tion, khadi has come to symbolise the simple, down-to-earth, frugal values of an eco-friendly existence. Progres-sive government policies, a return to hand-made and natural products and sustained development efforts have paid rich dividend. In spite of moderni-sation, Khadi's popularity has not faded. Khadi is traditional, but highly adap-tive, imbibing the modern methods of production, packaging, marketing and promotion to sell the same old good-ness of pure, hand crafted products, in contemporary style.

Khadi is as Indian as Made in India can ever be.

I N N OVAT I O N COR N E R P R O C E S S I N N O V A T I O N

Young innovator from the North East develops affordable machine that

processes bamboo at 25 times the speed of

manual processing.BY VIKRAM SINGH

WOOD WORTHBamboo is everywhere in India—it holds up

scaffoldings, wedding tents, roofs and welcome arches. Bamboo furniture adorns urban homes as well as corporate waiting rooms. Its pulp makes paper and rayon, while bamboo chips,

glued into boards, make for excellent building material. Bamboo grows to an average height of 35 feet but all of it is not used. At least five feet are snipped off from the tip and the base. But that is not all, once harvested, each bamboo pole must be processed. It involves removing the hard nodes or rings every few inches along the length of the pole. This is a must to smoothen the surface of the pole. The sur-face of bamboo is naturally coated with protective silica, giv-ing it its sheen. The silica must also be filed away in order


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to prepare its surface for texturing and for receiving paint.

Processing bamboo is a tedious, man-ual task. Using a short local machete, called the dow, workers in the North East hack away the protruding nodes of the bamboo, and rub the silica away with rough hand tools. However, their imprecise and irregular methods are crude and extremely time-consuming. For years, Imli Toshi Namo, a resident of Nagaland had observed the workers process the bamboo. In the best of cir-cumstances, they can process about 100 feet of bamboo per working day. That’s about five or six poles a day.

Imli grew up in Nagaland, roaming the sprawling bamboo plantations and observing the grass being harvested and processed, before it was shaped into furniture or items of handicraft. He was always struck by the enormity of the human labour that went into cutting away its nodes, filing away its surface and removing the silica. After graduating in Geology, he spent years thinking of a way to reduce the drudg-ery of the bamboo workers and helping them multiply their yield. By 2006, he had designed Arulepsa, the prototype of an integrated, precision-controlled, bamboo processing machine. Arulepsa processes five feet of highly finished bamboo per minute. That translates to 300 feet an hour, or 2,400 feet per working day of eight hours. That’s nearly 25 times the output of manual processing. “Even then, the finished bamboo that Arulepsa produces is far more uniform, better finished, well-planed and surfaced,” says Imli.

India is the second richest bamboo resource country in the world, next only to China. According to the For-est Survey of India, the North Eastern states of India have bountiful bamboo reserves. Although they cover only eight per cent of the country’s land area, the states together hold two-thirds of its bamboo that grows over more than three million acres. Currently, the global market size of bamboo products is worth US$ 10 billion. According to

the government’s National Bamboo Mission (NBM), India’s share of this market is a billion dollars, but by 2030, it can grow ten-fold. Apart from the most obvious use as scaffolding, bam-boo is used for making paper, rayon and bamboo boards.

Imli, 30, has been making machines and devising solutions for as long as he can remember. His innovative spirit has earned him the moniker ‘serial innovator’.

Although he had made the first pro-totype in 2006 and improved it a year later, Imli has so far been able to sell only one such machine. And that too, to a local government body. “It is not that the machine is not good enough or doesn’t do the needful. I have not yet been able to find an industrial house that will manufacture my machine for the market,” says a thoughtful Imli.

The prototype and its improvement cost him a total of INR 300,000 (US$ 6,725). He had funding from the Nation-al Innovation Foundation (NIF) and the National Bamboo Mission (NBM). When I met him at the Rashtrapati Bhawan in New Delhi recently, Imli was poring over machinery catalogues. He told me he was ordering a range of machines to set up his own unit for producing Arulepsa. Imli was in New Delhi, participating in an innovation exhibition organised by the NIF and at the invitation of President Pratibha Patil.

Since then, he has fer-ried the machines to his workshop in Dimapur, Nagaland. Imli says the first of the new machines should roll out by August this year. He is thinking of pricing them at INR 80,000 (US$ 1,800) each.

“That’s not much, con-sidering the substantial savings a company will make using Arulepsa”, says Imli. Accord-ing to him, the buyers of his machine are potentially all furniture manufactures and producers of handicraft products. In the North East itself, he should be able to sell a sizeable number of his machines,

but he says he has business enquiries from nearly seven states including far-away Andhra Pradesh.“The highlight of the machine lies in

using a single versatile wood process-ing platform for seamlessly processing bamboo. The precision in work is achieved by deploying the dedicated control centre and a user friendly four way joystick”, says Prof Anil K Gupta, Chairman of the National Innovation Foundation. The electrically operated machine weighs 75 kg.

NIF was among the first to help Imli through its Micro Venture Investment Fund. It has also taken Imli’s innova-tion to various forums, showcasing him and his work. “NIF has really helped me take Arulepsa from an idea in my head to a working machine on the ground. I have also been exposed to new opportunities through the fund,” acknowledges Imli.

In the four years since having made Arulepsa, Imli hasn’t been resting. Among his many innovations is one that is currently keeping him extremely busy. It is called the Solar Farm Produce Dehydrator and has really caught the fancy of officials and villagers alike. In the high moisture North Eastern states of India, keeping farm produce dry is an arduous task. Most people dry their ginger, chilli and fish either in a smoke

stack or out in the sun. Imli’s Solar Farm Produce Dehydrator is a simple contraption that uses specially treated polyurethane sheets in an innovative design.

In spite of his strug-gles and challenges, Imli’s spirit is indomi-table and his mind relentlessly innovative. While he waits for his

prototype to turn into an entire line of machines for sale, he spends his time working on new ideas. For sure, mak-ing furniture and items of handicraft from bamboo will soon become a lot easier, thanks to Imli Toshi.


ARULEPSA

Weight: 75-kg

Development Cost: US$ 6,725

Unit Price:US$ 1,800


Grand StandSit back and find out how the haloed National School of Drama produces its stars. BY RUCHIRA MITTAL.

and each one receives focussed and detailed training in all the aspects of theatre.”

With a curriculum which competes with the best in the world, the training here is detailed. Students regularly stage shows that they have written and directed. Dr Kapur elaborates, “It’s a three year course—the first year is like a foundation course, in which the students learn everything from carpentry to the theory of design to the history of theatre literature. In the first year, they acquire skills, in the second, they apply those skills, and in the third year, they learn the cycle of production, and improvisation, which is the main idea of the learning. Each

What do theatre stalwarts like B.V. Karanth and Sai Paranjpye, and acting legends like Om Puri, Pankaj Kapoor and Anupam Kher have in common? They are all alumni of the highly acclaimed National School of Drama (NSD).

Built on a sprawling campus in New Delhi, NSD is one of the fin-est theatre training institutes in the world and the only of its kind in India. The campus is abuzz with an unmistakable creative energy.

The students who fill its campus are graduates with a keen interest in theatre. They must pass a tough, nationally held entrance exam which includes practical theatre evaluations. Only a few enjoy the privilege of learning the finer nuances of theatre in the same classrooms where acting greats like Naseeruddin Shah once studied. Dr Anuradha Kapur, Director of NSD, told India Now: “We take about 26 students each year

ARTS &CULTURE

NSD's 350-seater Abhimanch

auditorium is a prime staging space. Students stage their production Jara Bada Ek Baseer (below).


N A T I O N A L S C H O O L O F D R A M A AR T S AN D CU LT U R E

During an international theatre exchange programme, students perform in American director Wendy Jehlen's production (above left). Final year student production Trojan Women underway at one of the auditoriums (above).

Students prepare

for a Kudiyattam demonstration during class (right). Kudiyattam is one of the earliest theatrical arts of Kerala.

CompaniesNSD has two performing wings – the Repertory Company and the Theatre-in-Education (TIE)

Company. The Repertory Company provides the all important platform for students to present their plays professionally. It tours

and performs extensively in India and abroad. A vital educational resource centre, TIE is a group of actors and teachers that produces plays

for schools with a thrust on the curriculum, enlivening them with the excitement of creativity, and taking away the dullness of predictability.

year, the third year students put up four pro-ductions, which gives them six to eight weeks per production. When they come out of the institute, they are ready for the theatre world.”

It is with an air of accomplishment that Dr Kapur states “Our teachers are practicing theatre professionals, and therefore, remain engaged and updated in their own fields.”

The syllabus includes Sanskrit and modern Indian drama, traditional Indian theatre forms, Asian drama and Western dramatic protocols.“After the ground-laying first year, the stu-

dents branch off into their own streams—act-ing and theatre technique. Here, the focus alters. Students of the acting stream train in music, dance, make up, martial arts, yoga, voice techniques and all the other aspects of acting. Those of the technical stream work with com-puters, on set design, lighting and direction, among other things. The range of instruction is wide and it enables the students to develop their own theatrical vocabulary,” adds Kapur.

NSD even has its own publication unit that translates and prints important books on theatre. The unit published the Rang Yatra in 1990, an extensive chronicle of the 25 year history of the NSD Repertory Company.

The school hosts many popular festivals. The Bharat Rang Mahotsav has grown from being a national festival into an international event. Bala Sangam is a cultural fair in which child art-

ists from traditional performing families, guru-paramparas and institutions participate. NSD also hosts a Sunday Club Festival—an enjoyable workshop which encourages improvisation. So much interaction is bound to create a two-way flow of ideas and energies—both welcome and necessary. Dr Anuradha Kapur adds with a smile that she is “proud to say that the school has remained open to adapting and evolving itself, its curriculum and training methodology.”

It is safe to say, therefore, that any Indian theatre production worthy of mention will definitely have been influenced by the National School of Drama in some way or the other.

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Summer in the plains of north India is particularly punishing. From early in May to well beyond September, the land bakes in mid-afternoon ovens of 45 degrees Celsius, or more. But a little more than 500 kilometres away, the pristine Himalayan bal-conies of Kullu and Manali in Himachal Pradesh bask in cool,

breezy comfort, sprayed with intermittent rain. There are three ways to reach Kullu-Manali. You can fly into Bunther,

the nearest airport. Major airlines fly this route. You can take an air-condi-tioned Volvo bus or drive yourself from Delhi to Kullu. On a good day, you can drive from Delhi to Chandigarh in five hours. From there to the well-connected temple town of Mandi in the hills is approximately a four hour

StunningKullu-Manali

drive. The scenic mountain drive from Mandi to Bunther takes you along the glistening Beas river, through the breathtaking Shivalik Hima-layan range–another nearly three hours. From Bunther to Kullu, it’s a smooth 30-minute drive in the backdrop of the majestic Himalayas.

All told a Delhi–Kullu drive will take you a little more than twelve hours. To enjoy the beauty of the drive, start really early from Delhi, preferably in the wee hours before sunrise. If you are unaccus-tomed to driving in the steep Himalayan tracts and

Warm and fuzzy-A government-run Angora rabbit breeding and research facility near Bunther is a must see.

Heaven on Earth: Stunning view from the Solang ropeway, 15 km from Manali.

View from the Top: A rolling valley stretches beneath the 13,000-foot Rohtang Pass.

UPDATETOURISM

KULLU

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Escape to the breathtaking Himalayan paradise this summer, and the next... BY RUCHIRA MITTAL.

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K U L L U - M A N A L I TO U R I SM U PDATE

squeamish about hair pin bends with sheer 1,000-foot drops on both sides, then reaching Kullu well before sunset is a good idea.

If you prefer to travel by train, try the historic narrow-gauge wonder from Pathankot in Punjab to Joginder Nagar near Kullu. Also called the Kangra toy train, it meanders through a maze of hills and valleys and tunnels. The 80-year old railway is a treat for the senses. Life-changing views, the heady smell of pine, fresh mountain air and the exhilara-tion of the climb, will set your adrenaline rushing.

Also called Silver valley for the shimmering waters of the Beas, Kullu was once known as Kulanthapitha - the end of the habitable world. Its lush forests, flower-carpeted hillsides and hovering butterflies beckon wide-eyed tourists.

Visit the ancient and powerful temple of the goddess Hirma who blessed the erstwhile ruler of Kullu. In the south, the cliffs of the Largi gorge form the gateway to the valley. The 80 km long fertile Himalayan strip extends from Aut and ends rather dramatically at the 13,000 foot high Rohtang Pass, which literally means a pile of corpses, in Tibetan. A little more than 50 km from lush Manali, Rohtang is on the eastern Pir Panjal Range, and gateway to the Lahaul and Spiti Valleys beyond. Even in high summer, be prepared for a sudden snowstorm or shower.

In Autumn, you can’t miss Kullu's famous, 10-day long Dussehra festival. There is dancing, singing and performances even from the Gaddi shepherds who climb down the hills.

Also called the Valley of the Gods, Manali is a welcoming town—it will charm you with its colour and beauty. Enjoy the majesty of the Himalayas, the gushing Beas cutting across the town, rolling meadows and lazy herds of goats and sheep dotting the hillsides.

Tourists can shop to their heart’s content in quaint shops and enjoy bargaining for handi-crafts. The adventurous sort can head out for treks and skiing on the snow covered slopes. The rapids of the Beas offer rafting fun and also delightful experiences if you just want to sit by the river and angle in meditative silence.

The sprawling Institute of Mountaineering and Allied Sports in Manali con-ducts week-long courses in skiing, trekking, adventure sports and eco-tourism along the Salong valley, just out of town. For trekking and climbing,

Patalsu and Sitidhar are among the easier climbs. More challenging are the Deo Tibba, Moulkila, Hanuman Tibba, Centre Peak and Indrasan.

If you want quiet natural beauty, visit Kothi at the foot of the Rohtang Pass. Behold the mag-nificent snow peaks and glaciers and prepare for the jaw-dropping view of a narrow, 60-metre deep gorge into which the Beas disappears.

In Manali, the Tibetan market on the mall is a visitor’s delight - shop for knick knacks, handi-crafts and imported goods. The Mall has some good restaurants, too.

Sixteen km out of Manali, right where the climb for Rohtang begins, the stunning Rahalla Falls at 8,200 feet, are a must-see.

Whether you’d like to simply laze, soaking in nature’s bounty, seek the peace of the monas-teries and temples, feast your eyes on ancient architecture and museums of art, try out adven-ture sports or imbibe the cultural extravaganza of festivals, Kullu-Manali has something for you.“Kullu-Manali are a unique, unparallelled trea-

sure. Consider the profound beauty of the Shivalik hills’ shallow valleys and their dense scrub forests in the outer Himalayan fringe; the spruce and cedar forests of the mid ranges, and; the alpine meadows of the intervening ranges near the snow clad peaks of the inner Himalayas. It’s the destina-tion of choice for every kind of tourist. And that’s why Himachal is known as a destination for all seasons and all reasons,” Dr Arun Kumar, Direc-tor of Himachal Pradesh Tourism told, India Now.

He said the state has worked hard to promote brand Himachal as an attractive tourist destina-tion under the caption Unforgettable Himachal. The department is aggressively promoting ecological, adventure, rural, sports and pleasure tourism in the region, he added.

Over the Moon at Chandrakhani: A 4-day trek from Manali to the fascinating Malana hamlet goes over the stunning pass.

FIVE KEY HIGHLIGHTS

Tall Cedars surround the more than 450-year old temple of goddess Hadimba in Manali.

For ten colourful days each autumn, devotees throng Kullu's temples and fair grounds to celebrate the Dussehra festival.

Tourists cross a fjord near the 4,200-ft Hamta Pass between Kullu and Spiti, beyond Rohtang.

The magnificent slopes of the Solang valley near Manali offer the ideal space for paragliding.

1. TEMPLE BELLS

2. KULLU DIVINE

3. STREAMS OF MIRTH

4. JUST LETTING GO

5. ADRENALINE RUSH

The streaming rapids of the river Beas bring tourists and adventure sports enthusiasts in hordes for the thrill of white water rafting.


Success, Naturally Engineer organises rural artisans

across Tamil Nadu to make products from natural fibre for buyers in the

US and Europe. BY HEMANT KUMAR

Ordinarily, one would think there is nothing in common between poor, unorganised

rural Indian artisans and corpo-rate America or Europe. But NN Sreejith’s enterprise is far from ordinary. An artisan he promotes in remote Tamil Nadu can turn banana rope into a product that will adorn plush Manhattan boardrooms or line the shelves of glitzy Ikea furniture showrooms across Europe.

Sreejith, 33, told India Now that he trained as a mechanical engi-neer but his heart lay in rural India. In 2007, he took an idea to the Indian Institute of Technol-ogy in Chennai, that helped form his orgainsation—Rural Oppor-tunities Production Enterprise (ROPE). The Chennai-based ROPE organises artisans in the villages of Tamil Nadu to make products from plants and their

by-products that would normally be thrown away as waste.

ROPE manufactures and sup-plies handmade and handloom woven natural products for large international retailers and buyers. To be commercially competitive and to meet the challenges of working with small artisans in rural areas, ROPE has developed methods that allow it to effec-tively and efficiently manage its supply chain. It has created a network of rural production cen-tres where indigenous artisans use locally available and envi-ronmentally friendly materials such as banana fibre, elephant grass, korai and sisal (types of reed) to hand-craft customer-specific corporate gift items and lifestyle products.“In a hub-and-spoke structure,

we organise rural producers into local production centres, creating systems for production manage-ment, ensuring quality and deliv-

ery, and aggregating the output and delivery to global buyers,” says Sreejith, explaining how ROPE functions.“We have a hub each in three

large districts of Tamil Nadu. They manage the spokes that fan out into the villages, ensur-ing that the rural workers clearly understand the customers’ requirements—down to design details, peculiarities, quality con-cerns and delivery schedules.”

Such has been the success of the idea, that ROPE has now spread to villages across Tamil Nadu, providing year-round employment to nearly 1,200 traditional rural workers, mostly women, right where they live.“There is need on both sides of

this market—big retailers and chains need quality hand-crafted natural products, and the arti-sans need sustainable work. We just bring them together,” adds a confident Sreejith.

RURAL

UPDATE

N N SreejithFounder of Chennai-based Rural Opportunities Production Enterprise (ROPE), Sreejith, 33, is a mechanical engineer by training. But he was more interested in working in the villages, among workers and artisans, than on machines and technology.

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A Canvas Called IndiaThrough painstaking research and extensive personal interviews, Patrick French sketches a portrait of India that's at once vivid and varied. BY HARSH KUMAR.

ONE in every six people on this planet is an Indian. One half of all people living in a democracy are also Indian, says Patrick French, author of the acclaimed book, India: A Portrait. What, then, is India?

It is difficult to draw a portrait of India. It is as diverse as it is vivid. The canvas will be more like a collage really, than a single, representative portrait. And why not. A giant melting pot of cultures, languages, traditions, practices, dreams and aspira-tions, India is a subject so vast, that it can’t possibly fit into a book. But Patrick French has done a marvellous job of doing just that. India: A Portrait is a sensitive look at India and its people. Avoiding generalisations and assumptions, it is more like a mural that people them-selves have made, through their unbridled, open-hearted discus-sions and interviews in the book. Author of the acclaimed best-seller Liberty or Death: India’s Journey to Independence and Division, French is well versed

ism with capitalism. Focussing on the most recent changes, he shows how the rapidly changing social mindset allows the deeply traditional and the startlingly unconventional to co-exist.

In an interview to a PTI cor-respondent in Kolkata recently, French, 45, said his 1997 book 'Liberty or Death: India's Journey to Independence and Divi-sion', was essentially about how and why the freedom struggle developed the way it did and why it ended with the political settlement. "But the new book is about what India is at this moment and the way it has trans-formed itself during the last 15-20 years," said French during the Apeejay Kolkata Literary Festival.

In his second, and more famously known, book on India, the renowned British author and historian traces the country's rise to global prominence. In it, he describes how India evolved into a prominent nation of enormous promise and achievement in spite of its contradictions and conflicts after Independence.

with India and its varied hues.In his new book, he chronicles

a changing India, from a fledg-ling nation struggling for the basics through the fifties and much of the seventies, to the tiger economy of the new century.

It is a compelling narrative of the social and economic revolu-tions that are transforming India in fundamental ways. "In India, I have tried to write about the country both from the inside and from the outside--or from a distance," says French in the introduction to his book. "The information passes through three different prisms," he goes on. "The first is political, the second economic and the third social." French says the individual stories, aspirations and triumphs of many people are at the heart of the narrative. The book walks you through the experience of being independent India from its birth until now. Beginning with an account of how the Union came into being, French examines India’s unique experimental blending of social-

British writer and historian, Patrick French, 45, studied literature at the University of Edinburgh. At 25, he trekked across Central Asia, retracing the steps of British explorer Francis Younghusband, eventually writing his hugely successful biography. In 2008, he wrote Nobel Laureate V S Naipaul’s highly acclaimed biography, The World Is What It Is.

ABOUT THE AUTHOR

“Indians are responsible for

one in six Silicon Valley startups...”


ECONOMY: "India, with its more strictly regulated banks and its deep tradition of saving, was to an extent protected from the worst effects of the global credit crunch."

BOOK EXCERPTS

On why he has chosen to focus more on India's economic revolution in the book, French told PTI he felt the country is now being driven by economic rather than political movements.

"India particularly is an interest-ing country. It has more variety than any other country that I have been to. Whether it is the people who live together with different religions, speaking languages different from each other, living in places which are geographically so different from each other," he told PTI.

Married to an Indian, the award-winning writer says he has been fascinated with India ever since he was a young boy in England. In 2008, his authorised biography of Nobel laureate V S Naipaul, The World Is What It Is, won international acclaim.

French says in the new book that India has lifted more people out of poverty since the economic reforms of 1991, than at any time in its history, and yet, it remains a vigorous democracy. "Globally, India is now sometimes por-trayed as having a competitive edge over more sluggish devel-oped countries that have aban-doned thrift, given up on saving and refused to postpone gratifica-tion. Values that are embedded in an Indian way of life appear to have an unexpected relevance."

He has divided his book into three parts: Rashtra (the nation), Lakshmi (wealth), and Samaj (the society). It is a detailed, in-depth narrative for a serious-minded reader who really wants to get into the heart and soul of India.

Each of the three sections, says French, "Seeks to answer, in an indirect way, the question: why is India like it is today?"

French makes a strong point when he says: "Nearly everyone has a reaction to India, even if

they have never been there... For East Asians, it is a competitor and a source of some of their own spiritual traditions. For Americans, it is a challenge, a potential hub of cooperation or economic rivalry--both countries are diverse and hulking, their national identities strong and to an extent constructed, their pop-ulations loquacious and outgoing and admiring of entrepreneurial success. For many Europeans, India is a religious place with a special, undefined mesage."

In the chapter Only in India, under the section Samaj, French says: "In the past, singular stories from India - the Dab-bawallahs, reverse-gear driving... had only entertainment value or local relevance. But Indian methods were now extend-ing to other parts of the globe. Nandan Nilekani, who was the inspiration for Thomas Fried-man's The World Is Flat, spoke of 'the Indian way of working.' He was referring specifically to the software industry and to the practices developed at Info-sys, but the concept extended to other industries, too."

About the Indian spirit of improvisation, French says that unlike the Chinese, "Indians are experienced at dealing with people with different cultures and languages."

In the same chapter, the author says: "Jawaharlal Nehru... was an admirer of Aryabhatt and the society that gave rise to him. He saw the mathematical advances of ancient India - the use of frac-tions, division, squares, cubes, the minus sign, algebra, pi and infinity - as the outgrowth of a developed society..."

From the opening pages itself, French grabs your attention, describing India’s separation of 1947 and all the pain that it brought. His keen portraits of the able men and women that led India through its formative years, well into the 90s, are also engaging.

In a recent interview, engineer-turned journalist and blogger, John Cheeran, asked French what made him describe India as the most interesting place in the world. The author replied: "Can you think of a more interesting country?"

The book is advertised as “an intimate biography of 1.2 billion people”. Through detailed inter-views, French lets his subjects open up to him and speak. He cleverly pads each such interview with details from books, reports, and personal observation.

French says: ‘”India is a mac-rocosm, and may be the world’s default setting for the future.”

Rings true.

"I've tried to write about the country both from the inside and from the outside... The information passes through three different prisms. The first is political, the second economic and the third social."

CONSTITUTION "It was a clear, well-intentioned and cleverly thought-out document which balanced liberty and security, shared power and did not rely on the goodwill of any one leader."Quoting B RAmbedkar

BO O K S H E LF

Documents

India-Now-Vol-2-Issue-01-APRIL-MAY-2011.pdf - IBEF