Industry shrugs off blues, sees brighter second ha
Assocham offers selloff recipe
Infotech firms look for future outside Bengal
Alcatel educa ion tieup with BSNL

New Delhi, Nov 12: 
Despite the September dip in the index for industrial production to 5.4 per cent, the Confederation of Indian Industry (CII) is bullish about a pick-up in the next six months.

According to CII�s 54th business outlook survey which forecasts trends for the second half of the financial year, 88 per cent of the respondents expect an increase in production compared with 96 per cent in the previous year.

Only 12 per cent of the respondents saw a decline ahead. Of those who expect an upturn, 35 per cent said growth will be above 10 per cent, 20 per cent felt it will be in the range of 0 to 5 per cent while 33 per cent said it will be between 5 and 10 per cent.

The survey is based on the response from 265 companies. It relates to the actual performance of the industry during April-September 2000, and the forecast for October-March 2000-01.

The survey covers all sectors, including small, medium and large enterprises spread across various regions and states.

Consumer durable companies and the services sector are among the ones which could see a 10 per cent plus growth rate.

However, it is the manufacturing sector, particularly capital goods and intermediate goods firms, that are still despondent, expecting negative growth over the next six months.

Of those surveyed, 39 per cent expect profit margins to improve, 35 per cent expects no change and 25 per cent foresee lower profits during the next six months.

In the preceding six months, only 28 per cent of the respondents saw an increase in their profit margins, 25 per cent reported no change while 47 per cent of the respondents suffered a decline in profits.

In another survey based on the response from 159 exporters, the CII has projected that exports in the next six months will continue to grow in terms of volume and value.

The survey takes into account the actual performance during April-September this year and the forecast for October-March.

Of the companies polled, 59 per cent were optimistic exports in volume terms will improve during the next six months, 31 per cent expect the same trends to continue while 10 per cent foresaw a deceleration in the momentum of growth.

In the past six months, 45 per cent reported higher volumes, 38 per cent said there was no change while 16 per cent had suffered a fall.

In value terms, 62 per cent of exporters expect an increase in the next six months, 30 per cent see no change and only 8 per cent feel their shipments will bring them fewer dollars.

In contrast, for the six months ended September, 21 per cent of the respondents reported a slump.

The service sector is the most optimistic about exporting more.

A high 71 per cent of those surveyed said they expected an increase while 29 per cent felt the same trends would continue.

High prices, growing international competition and the rising cost of credit were listed by exporters as the biggest short-term impediments.    

New Delhi, Nov 12: 
Bigger chunks at shorter intervals � is how the Associated Chambers of Commerce and Industry would like the divestment pie to be cut.

In a blueprint for disinvestment in public sector units, Assocham has recommended a shift from the annual divestment exercise to a medium-term strategy that aims at divesting bigger chunks of shares in PSUs.

The paper will be taken up at the National Symposium on Disinvestment Imperatives on November 14, which will have minister of state for disinvestment, Arun Shourie as the chief guest.

The paper suggested that the government keep its direct shareholding below the level being offered to the strategic bidder, by divesting some portions of its equity to multilateral financing institutions, private equity funds, mutual funds and a few select PSUs with business interests in the particular PSU being disinvested.

Assocham has said that where the government was divesting less than 50 per cent of its stake, special measures should be taken to ensure the independence of the management.

This could be done either by roping in private management, or by incorporating corporate governance norms in PSUs. The chamber pointed out that giving the management complete autonomy to take all decisions regarding operation, investment, pricing, production and employment, were important steps towards disinvestment.

Assocham also suggested the setting up of a regulatory authority which will adopt a transparent, contract-based approach to disinvestment and privatisation, to build confidence among investors in the bidding process.

The paper further states that a contract-based approach would lend certainty to investors as it would specify in advance the service standards, initial price levels, and the price adjustment mechanism.

Further, the chamber identified a number of potential abuses in the privatisation programme, including asset stripping particularly when there is a minority shareholder, changing the agreed terms and conditions of employment and retrenching of labour.

To prevent these, it also suggested the provision of golden shares, which allows for the takeover of the company by the government in the event of a breach of commitment made by the new owners.    

Calcutta, Nov 12: 
After losing the brick-and-mortar companies to more attractive destinations like Mumbai, Gurgaon and Surat, Bengal is finding it hard to retain its small cluster of infotech upstarts who say the state does not have enough people who meet the requirements of a knowledge-intensive industry.

Globsyn Technologies, the city-based infotech education company with a turnover of Rs 18.94 crore, has become the first infotech company to shift its corporate headquarters to Gurgaon.

According to Globsyn managing director, Bikram Dasgupta, the move is part of the company�s plan to expand its overseas business and achieve its growth objectives.

The company plans to cater to the mobile telephony sector and is in the process of finalising talks with a Scandanivian firm for networking. It will also set up a wholly-owned subsidiary in the UK and will forge a partnership with a UK-based consulting firm.

These are plans Dasgupta says will be achieved more easily if he is based in the capital. �Delhi, the hub of most infotech majors, facilitates business networking. Moreover, it is easier to recruit quality manpower there. In Calcutta, you are hobbled by the lack of trained people once you start expanding operations. Cost advantages here do not compensate for the problems. I have been in Delhi for the past 15 years, and I am more comfortable working there,� he said.

Other infotech companies expressed similar sentiment on the lack of trained people in the state. Says Shobha Shankar, director (human resources) at CATS:

�If we were to have a walk-in interview, I would have it in Delhi, or in South India. The requirements of the IT industry are skill-based. And the education system in Bengal does not produce manpower suited to the needs of a technology-oriented industry.�

The statements seem to explode the myth that Calcutta is a hub for intellectual capital. �Engineering graduates in infotech-related fields usually prefer to move out of the city because of the limited opportunities here,� says Pooja Kohli, assistant manager, human resources, Sky-Tech Solutions Pvt Ltd.

Compared with the prospects of setting up a business venture in Calcutta, Gurgaon is better placed, and is developing into a major centre for the IT industry. With Delhi and Noida almost clogged, Gurgaon provides the right ambience and development space for the knowledge-based industry.

�Gurgaon, with its infrastructure facilities and support from the government, will soon be what Noida is today. Though Saltlec came up much earlier, the development in terms of infrastructure and industry has not been up to expectations,� says Kohli, supporting his choice of Gurgaon.

With Globsyn looking to double its turnover to Rs 40 crore in the current financial year, the choice of Gurgaon as the corporate head office was not surprising. �Our focus is now on expansion � both nationally and globally. The decision to shift the corporate headquarters was part of the restructuring activities and our growth objectives,� he said.

To start with, Globsyn plans to set up a development centre in Delhi in the first quarter of 2001. The company will raise its equity base further from Rs 18 crore through a combination of private placements and public issue. It has mopped up Rs 9 crore worth of equity over the last six months through the private placement route.    

New Delhi, Nov 12: 
Alcatel is likely to set up a pilot demonstration project for tele-education in India, in association with Bharat Sanchar Nigam Ltd.

At a meeting with communications minister Ram Vilas Paswan in France, the French telecom major Alcatel has offered to set up a pilot demonstration project for tele-education.

The project will not only provide facilities for education but also value-added services for agriculture, police services and panchayat level communication.

Alcatel is also planning to make India its global source for switching equipment. Providing equipment for call centres was another area where Alcatel was keen to cooperate.

In fact, more and more French companies are keen on increasing their presence in the Indian market.

The ones that have already indicated their intent to increase their presence in India include Alcatel, Vivendi and France Telecom. Besides Alcatel, representatives of France Telecom, Sate Conseil, Thomso, Sagem SA, Radial, Elason, Bouygues Telecom and Vivendi also made presentations to Paswan.

Paswan conveyed to the French industry that the government was keen to promote the growth and development of the telecom industry and to increase the tele-density to seven per hundred by 2005 and 16 per hundred by 2010. India, he said, was determined to achieve these figures, but it required an investment of $ 78 billion.

�There exist several opportunities for French companies to participate. Although French exports to India have grown during the last year, investment from France is only 1.94 per cent of the total foreign investment in telecom in India,� said Paswan.    


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