Indian Rupee getting hotter day by day

For the first time after nine years, the rupee breached the psychological mark of 40 to touch 39.85 against dollar on September 20, 2007. With US Federal Bank cutting the interest rate by 50 basis points, the rupee has breached the level of Rs. 40 much before than expected by the markets. The main reason being the sudden spurt in capital inflows. BNP Paribas' country treasurer Manoj rane said: "the rupee could touch 38.5 level against dollar by year-end. we can expect the rupee to rise further on the back of strong capital inflows".

Why the US FED rate cut influences our currency?

Typically, when US lowers interest rates, FIIs begin looking for greener pastures like India and China, where they can earn a higher return. When dollar inflows rise into these countries, local currencies in these markets begin to grow stronger. Hence, as a result of US FED rate cut by 50 basis points and also hardened interest rates in India combined with strong capital market, there will be a spurt in FII inflows in short term which will increase the demand for rupee and thereby, rupee will appreciate further. If the dollars coming into India are not compensated by the requirement of importers, the RBI has to intervene into the forex market by buying dollars so as to maintain the current level. But, it has side effect, the increase in money supply and thereby, inflation. Keeping in view the general elections in 2009, the Government cannot afford to neglect inflation management. As the role of RBI is limited in the present circumstances, the Rupee will appreciate further and I expect the rupee to appreciate to a level of Rs. 35 towards the end of current fiscal.

The appreciation of rupee during the current financial year already effected many sectors like IT, textiles, leather industry, pharmaceuticals. This new phenomenon has forced many mid sized software and other exporters to hedge against the foreign currency fluctuations.

With the appreciation of rupee and also acceptability of rupee increasing in the Gulf and South East Asian markets, trading in rupee futures is picking up. In Dubai exchange, rupee futures trading is already picking up.

Inflation is for soft landing - dips to 3.32% for the week ended September 08, 2007

The official Wholesale Price Index for 'All Commodities' (Base: 1993-94 = 100) for the week ended 8th September 2007 rose by 0.1% to 214.7 from its previous week level of 214.4. The annual rate of inflation, calculated on point to point basis, stood at 3.32 percent for the week ended 08/09/2007 (over 09/09/2007 ) as compared to 3.52 percent for the previous week. The annual rate of inflation stood at 5.22 percent as on 09/09/2006 i.e. a year ago. The annual rate of inflation declined due to the larger base of last year.

The index for 'Food Articles' group rose by 0.2 percent due to higher prices of fruits & vegetables, condiments & spices, barley and wheat (1% each). However, the prices of bajra (3%), fish-marine (2%) and maize (1%) declined.

The index for 'Non-Food Articles' group rose by 0.1 percent due to higher prices of fodder (2%) and raw cotton, groundnut seed and cotton seed (1% each). However, the prices of niger seed (6%), soyabean (4%) and raw tobacco and sunflower (2% each) declined.

Central Statistical Organisation revises it inflation figures after two months of releasing the provisional figures. For the week ended 14/07/2007, the final wholesale price index for 'All Commodities’ (Base: 1993-94=100) stood at 213.6 as compared to 212.9 (Provisional) and annual rate of inflation based on final index, calculated on point to point basis, stood at 4.76 percent as compared to 4.41 percent (Provisional) reported earlier.

Related Articles:-

• Inflation rate tumbles, courtesy ‘base effect’ - Business Line - September 22, 2007
• Inflation nears 5-year low at 3.32% - The Times of India - September 22, 2007
• Inflation hits near 5-yr low of 3.32% - The Economic Times - September 22, 2007
• Inflation hits lowest since Dec 2002 - The Indiainfoline.com - September 21, 2007

GMR is on recruitment drive for CEOs and middle level management positions

The GMR Group has initiated a realignment of its organisational structure to grab future opportunities with both hands while leaving line functions to professionals. Mr. G M Rao, Group's Chairman, has decided to move away from day-to-day operations to take on strategy and big picture roles and also as mentor for senior leaders.

As part of the formula prescribed by McKinsey, four new corporate chairmen will drive the verticals of airports, urban infrastructure and highways, energy and agribusiness, and international business. The new organisational structure will be in place from October 1, 2007. Under this structure, Mr. B. Srinivas, the current MD of Delhi International Airport, will become the chairman of urban infrastructure and highways business, Group director Mr. B V N Rao will be the chairman of the energy vertical, while Mr. G B S Raju will head international business and Hyderabad International Airport MD, Mr. Kiran Gandhi, will take charge of the airport domain.

As per the available information, there will be four CEOs taking charge of Delhi and Hyderabad airport operations, aviation special eocnomic zone and business development. Similarly, divisions of roads, property, urban infrastructure and construction will have their respective CEOs. The group is in the process of a huge recruitment drive to fill these top slots.

The main strengths of the GMR group are

1. The group has an operating asset base of Rs. 3,600 Crores.
2. The group plans to invest around Rs. 14,000 crores in the next five to six years.
3. The GMR Group-led consortium is developing a greenfield airport in Hyderabad, a brownfield airport in Delhi and has won the bid for renovating an airport in Istanbul.
4. The group has also deep presence in the highways and energy sectors. It wants to enter in the agribusiness in a big way.

Careers - Senior Hydro Professionals

GMR Group is developing medium to large sized hydroelectric projects in Uttaranchal and Arunachal Pradesh in India. These are in various stages of Development. They are looking for professionals with proven experience in hydroelectric projects for it's hydro initiatives. Candidates must have a good understanding of the dynamics of hydroelectric projects and should have relevant experience on some / all aspects of the development including Engineering, Land Acquisition, Environmental and Other Statutory Clearances, Detailed Project Reports, Cost Estimations, Contracts, Project Management and Site Set Up and Management etc. Candidates should be well versed with key aspects of Hydroelectric Project development / construction areas.

Please e-mail your detailed resume or Application Form to careers@gmrgroup.in or rajib.misra@gmrgroup.in

Manufacturing Career in GMR

As a leading producer of agri-products in the rural district of Andhra Pradesh, GMR Group offers exciting career opportunities for professional engineers, quality managers, human resource personnel, environmental experts and project managers. If you would like to be part of the GMR Industries team, please use the application form or mail your resumé to careers@gmrgroup.co.in

Careers in Hyderabad International Airport (Part of GMR Group)

The GMR Hyderabad International Airport offers talented and dynamic professionals excellent career opportunities in technical, commercial and administrative areas of Airport Management. Their people-centric HR policies are geared for professional and personal growth of employees. Customized training programs and workshops designed to bridge competency gaps are conducted regularly. Presently there are openings in the following areas. Please click on each of them to know the details.

1. Project management
2. Business Development
3. Corporate Relations
4. Airport Operations
5. Finance & Accounts
6. Human Resources
7. Information Technology

Careers in Delhi International Airport (Part of GMR Group) - Advertisement - 30-08-2007

GMR Group's Press Release dated 29-08-2007

GMR Group undertakes a significant restructuring programme to sustain an empowered institution

Inflation further dips to 3.52 percent for the week ended 1st September, 2007

The official Wholesale Price Index for 'All Commodities' (Base: 1993-94 = 100) for the week ended 25th August 2007 rose to 214.4 from its previous week level of 213.6. The annual rate of inflation, calculated on point to point basis, stood at 3.52 percent for the week ended 01/09/2007 (over 02/09/2007 ) as compared to 3.79 percent for the previous week. The annual rate of inflation stood at 5.27 percent as on 02/09/2006 i.e. a year ago. The annual rate of inflation declined due to the larger base of last year.

Central Statistical Organisation revises it inflation figures after two months of releasing the provisional figures. For the week ended 07/07/2007, the final wholesale price index for 'All Commodities’ (Base: 1993-94=100) stood at 213.3 as compared to 212.6 (Provisional) and annual rate of inflation based on final index, calculated on point to point basis, stood at 4.61 percent as compared to 4.27 percent (Provisional) reported earlier.

Related Articles:-

• Indian inflation hits two-year low but no early rate cut seen - afp.google.com - September 14, 2007
• Inflation in India drops to two-year low, but rising food prices remains a concern - The Associated Press - September 14, 2007
• Annual inflation at 3.52 pc on Sept 1 - The Economic Times - September 14, 2007
• Inflation falls to 17-month low of 3.52 per cent - Business Line - September 14, 2007
• India's Inflation Rate Slows to Two-Year Low of 3.52% (Update2) - Bloomberg - September 14, 2007
• Battle against inflation getting tougher, RBI vigilant: Reddy - The Economic Times - September 13, 2007

Monetary Snapshot - September 13, 2007

The Indian rupee paused in its push towards nine-year highs on Thursday, held mostly steady by a combination of suspected central bank intervention and dollar purchases by oil refiners, traders said. The partially convertible rupee ended at 40.45/46 per dollar, just weaker than Wednesday's close of 40.4475/4550.

"The central bank seems to be defending the 40.40 level, but we are seeing plenty of dollar supplies. So, it seems they would not be able to hold the rupee around this level for long," the chief dealer with a private bank said.

On Wednesday, the Reserve Bank of India said it had bought $11.43 billion in intervention in July -- the month the rupee hit a nine-year high of 40.20 against the dollar. The central bank bought $38.1 billion in intervention in the first seven months of this year.

Traders said there was heavy dollar buying by oil firms to make import payments as oil traded near $80 a barrel. Oil is India's biggest import, and rising prices raise the risk of a wider trade deficit.

Traders expect the rupee to rise in the coming days, helped by a pick up in capital inflows. Foreigners bought nearly $780 million of local shares in the first seven days of September, taking net purchases this year to more than $9.1 billion.

The different macro economic monetary indicators

• Bank Rate (Currently this rate, which is that rate at which the RBI lends overnight money to commercial banks ) : 6.0%
• Repo Rate ( The repo rate is the rate at which the RBI borrows from the banks) : 7.75%
• Reverse Repo Rate (The reverse repo rate is the rate at which banks park their short-term excess liquidity with the RBI): 6.00%
• Call Rates (rate of inter-bank call money market where banks borrow funds to meet their RBI reserve requirements) : 5.25% - 6.15% (previous day)
• CRR (Indian banks are required to hold a certain proportion of their deposits as cash. This ratio is stipulated by the RBI ): 7.00%
• SLR (It is the amount which a bank has to maintain in the form of cash, gold or approved securities. The quantum is specified as some percentage of the total demand and time liabilities of a bank. This percentage is fixed by the Reserve Bank of India. ) : 25.0%
• PLR ( The Prime Lending Rate is the interest rate charged by banks to their most creditworthy customers. This rate is fixed by RBI) : 12.75%-13.25%
• Savings Bank Rate (Interest rate given on savings bank deposits) : 3.5%
• Deposit Rate (Interest rate paid on deposits with the banks) : 7.50%-9.60%

Exchange Rates as on 13-09-2007

INR / 1 USD : 40.4400
INR / 1 Euro : 56.2000
INR / 100 Jap. YEN : 35.3800
INR / 1 Pound Sterling : 82.0100

Source: The Economic Times, RBI

Industrial growth slows down to 7.1% in July, 2007

The Quick Estimates of Index of Industrial Production (IIP) for the month of July 2007 have been released by the Central Statistical Organisation of the Ministry of Statistics and Programme Implementation. The industry has grwon at 7.1% as compared to the level in the month of July 2006. This is the slowest IIP growth in the last eight months. A lower growth can be partly explained by a higher base effect. The cumulative growth for the period April-July 2007-08 stands at 9.6% over the corresponding period of the pervious year.

Alongwith the Quick Estimates of IIP for July 2007, the indices for June 2007 have undergone the first revision and those for April 2007 have undergone the second (final) revision in the light of the updated data received from the source agencies. Even, industrial growth figures for June ‘07 has been revised downwards to 9% this month as against the initial estimate of 9.8% growth.

The adverse effects of rising interest rates and tight monetary policy are evident. Higher rates affected sectors such as automobile and housing the most. As a result production of machinery and transport equipment and non-metallic products which has cement as a major item slowed down. Small sectors like jute and jute products, wood and wood products along with basic metals have recorded outstanding growth in the range of 16-22 %. Besides, power generation rose 7.% on top of a 8.9% growth in July 06.

In terms of industries, as many as thirteen (13) out of the seventeen (17) industry groups (as per 2-digit NIC-1987) have shown positive growth during the month of July 2007 as compared to the corresponding month of the previous year. The industry group ‘Wood and Wood Products; Furniture and Fixtures’ have shown the highest growth of 21.1%, followed by 17.5% in ‘Basic Metal and Alloy Industries’ and 16.1% in ‘Jute and other Vegetable Fibre Textiles (except cotton)’. On the other hand, the industry group ‘Metal Products and Parts, except Machinery and Equipment’ have shown a negative growth of 5.1% followed by 4.6% in ‘Paper & Paper Products and printing, Publishing & Allied Industries’ and 4.1% in ‘Food products’.

As per used-based classification, the impact of interest rate is visible in many sectors. Decceleration in capital goods production in the initial months of FY08 has put a pause button on the five-years rally. Moreover, there is a sharp moderation in intermediate goods to 4.7% as against a growth of 10.7% a year ago. Slowdown in investment activity coupled with a lower intake of raw material reflects a moderation in industrial activity so far this year. Whether the latest figures are just an aberration or a beginning of a southward trend remains to be seen.

Going forward demand will influence the trend. A 3.2% fall in production of consumer durables this month deepened the existing trend in consumption slowdown. Things could look up a little with the festival season demand. But, this could be short-term . Later on, liquidity position, outlook on inflation and Reserve Bank’s measures to deal with the evolving situation will set the tone of consumption demand for the rest of the year.

On investment demand front, the existing situation is not very encouraging . Higher domestic interest rates, steep rise in overseas rates on account of liquidity crunch arising out of sub-prime crisis and a cap on foreign loans may play a spoilsport.

Promoted as Joint Commissioner of Income Tax

Hai Freinds.

Thank you very much for the support given by the viewers of this blog. It has been a wonderful experience to blog. I am a regular reader of The Economic Times and other financial papers regarding the state of our economy, sectoral performances and all macro economic indicators since 1991, when Indian economy has faced balance of payment crisis due to Gulf War and when the Economic Reforms have been initiated by the then FM, Mr. Manmohan Singh. It is a long way since then. Economics was one of my electives in my engineering days in IIT, Kharagpur and I got EX grade in Industrial Economics and I did write one small thesis on "Gulf Crisis and its effect on Indian economy" for the elective.

Coming to professional life in Indian Revenue Service (IRS), I always tried to contribute my best to the Service and the Income Tax Department. As all of you know, the promotion in Government is based purely on seniority and also subject to the vacancies available in that cadre. Based on the seniority, after completion of almost ten years in the service, yesterday, I have been promoted as Joint Commissioner of Income Tax from the level of Deputy Commissioner of Income Tax. The Central Board of Direct Taxes (CBDT), New Delhi, which issues the prmotion and transfer orders posted me in Transfer Pricing in Banglore, Karnataka.

What is Transfer Pricing?

Transfer Pricing is a concept which mainly deals with valuation of cross border transactions between related parties. As per the provisons of Sec. 92CA of the Income Tax Act, 1961, if any person has entered into an international transaction (transaction between related resident and non-resident persons or associated enterprises) in any financial year, and the Assessing Officer (the Officer who assesses the income of Indian entity) considers it necessary, he refers the computation of the arm’s length price in relation to the said international transaction under to the Transfer Pricing Officer. the Transfer Pricing Officer, after gathering all the material from the assessee (tax payer) or from any other source and after giving due opportunity to the assessee to explain, determines the price at which the transaction should have taken place if both the parties areunrelated or at arm's length principle. There are various methods by which the arm's length price can be determined.

Some of the methods prescribed in the Act for determing arm's length price are:-

1. comparable uncontrolled price method;
2. resale price method;
3. cost plus method;
4. profit split method;
5. transactional net margin method;

The Assessing Officer has to apply the most appropriate method relevant to the filed in which the resident or non-resident is dealing. Of course, it will take some time before I can give lectures on Transfer Pricing. The Transfer Pricing is the most happening thing along with International Taxation in my Department as cross border transactions are increasing and also overseas Mergers & Acquisitions are on the raise.

Why Transfer Pricing:-

I will take classic example of software MNCs setting up shop in India. Most of the software companies either susidiaries of parent US or foreign companies or branches of foreign companies are claiming 100% income tax exemption U/s 10A or 10B by setting up their units in STPI areas or SEZs. Now, when these MNCs sell their software products or services to their parent companies or their subsidiaries, they inflate the sale value and claim more profits so that they get more benefit by way of income tax exemption here in India. This also results in claiming more expenditure in the country in which they are residents, thus saving both ways. Hence, the Transfer Pricing Officer (TPO) will determine the correct price at which such transactions take place as if both parties in the transaction are unrelated and the resident company, branch or firm will be denied income tax exemption on the difference between the reflected value of the transaction and the value determined by the TPO.

Thank You.

If you have any doubts on transfer pricing, I hope I can answer some of them. Please e-mail me at pramoneel@yahoo.co.in for answering the questions only on the basic provisions of the Act or on transfer pricing in general, as I am precluded from giving an opinion as I am a Government Servant.

IL&FS, Milestone launch real estate fund

For those who do not have time and where withal and also do not have the knowledge and nitty gritties of the real estate sector, there is a good news from IL&FS Investment Managers and Milestone Capital Advisors who have launched a real estate fund. The brief summary of the fund:-

• Description of the Fund: IL&FS-Milestone Fund-I is an yield-driven real estate investment fund based on a structure similar to the real estate investment trusts (REIT). Worldwide it is the most popular investment route for corporates and individuals to invest in real estate.
• Scheme: It is a close-ended scheme with a lock in period of four years, with an option to extend the term by a year and if required by one more year.
• Fund Size: The fund is targeting a corpus of Rs 1,000 crore, which includes a greenshoe option of Rs 500 crore.
• Last Date for Initial Offer: The fund will remain open for subscription till October 30, 2007.
• Minimum Investment: It will be the first real estate investment fund in India to offer a low minimum investment commitment of Rs 10 lakh for individuals (in multiples of Rs 5 lakh thereafter) and Rs 1 crore for corporates, with the convenience of draw-down spread over 12 months.
• Distribution of Profits: IL&FS-Milestone Fund-I will offer a quarterly yield distribution to investors and property appreciation benefits in the long term. The fund is targeting an annual yield of 11% (pre-tax) and an internal rate of return of 18-20% (pre-tax) with property appreciation.
• Portfolio: The funds raised in the initial public offer at par would be invested in office buildings, hospitals, hotels, warehouses and shopping malls. The managers would invest 30 per cent each in retail and office properties, 20 per cent in IT and ITeS and 10 per cent each in warehousing and office properties.

CONTACT DETAILS

IL&FS Investment Managers Limited

Mumbai

The IL&FS Financial Centre

Plot No. C - 22, G Block,

Bandra Kurla Complex,

Bandra (East),

Mumbai 400 051

Phone: +9122-2653 3333 / 2653 3232

Fax: +9122-2653 3056

Bangalore

Aum Plaza

1st FloorNo 76, 3rd Cross

Residency Road

Bangalore 560 025

India

Phone: +9180-4034 3333

Fax: +9180-4034 3310

Contact Email: sanjay.mitra@ilfsindia.com

Related News:-

• IL&FS, Milestone launch real estate fund - The Economic Times - September 10, 2007
• IL&FS, Milestone open door for realty investment - The Economic Times - September 11, 2007

India lags Lanka, Bangladesh in labour efficiency

The United States remained the most productive economy in 2006 in terms of labour productivity per person, far outstripping its nearest rivals among other developed economies, the ILO said in its fifth edition of bienniel report titled "Key Indicators of the Labour Market".

US workers added 63,885 dollars (46,890 euros) of value to the economy per person, way ahead of its nearest competitors Ireland (55,986 dollars), Luxembourg (55,641 dollars), Belgium (55,235 dollars) and France (54,609 dollars).

However, the ILO noted that this is chiefly because Americans work more hours per year than in most other developed countries. When productivity is measured in terms of value added per hour worked, Norway came top with a level of 37.99 dollars -- though the US does then come second with 35.63 dollars.

In South Asia, including Bangladesh, India, Pakistan, Nepal and Sri Lanka, productivity rose by around 50 per cent during the same decade, the report said. However, India's labour productivity, which is pegged at $6,587, is way behind Sri Lankan's productivity level of $11,320, Pakistan's $8,247 and Bangladesh's $43,315.

South-east Asia includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam while East Asia comprises China, Hong Kong, Japan, South Korea and Taiwan.

But South-east Asia sharply reduced its rate of vulnerable employment - defined as when a worker is at risk of falling back into poverty - by 5.7 percentage points to 59.2 per cent. That put the region ahead of South Asia at 78.2 per cent but behind East Asia at 56.2 per cent.

Increases in productivity are mainly the result of companies combining capital, labour and technology better, the report said. A lack of investment in people, equipment and technology can lead to an under-utilization of the productive potential of labour.

Rising productivity levels in Asia are a boon and not a threat to the world economy, as growing prosperity spurs a demand for products made elsewhere in the world, the International Labour Organisation said. "Some see the impressive growth of productivity in Asia and South East Asia as a threat, but let me stress that it is in fact a positive trend for the world economy," said ILO employment executive director Jose Salazar-Xirinachs. "As their middle classes grow, they earn more money, they consume more goods and services, so these regions will become consumers for goods and services produced in Western countries and in the rest of the world," he added.

View the Complete Report

Key Indicators of the Labour Market (5th Edition) - ILO

Download the complete Report -

Key Indicators of the Labour Market (5th Edition) - ILO

Related Articles:-

• Asian productivity surge to boost global economy: ILO afp.google.com - September 02, 2007
• Labour productivity in South-east Asia "stagnant," ILO says - monsterandcritics.com - September 02, 2007
• Labor productivity stagnant in Southeast Asia: ILO - The Economic Times - September 03, 2007
• Asian productivity surge to boost global economy: ILO - The Economic Times - September 03, 2007
• PRESS CONFERENCE ON KEY INDICATORS OF LABOUR MARKET REPORT - PressZoom.com - September 11, 2007

Estimates of GDP by Economic Activity for the First Quarter of Current Fiscal

Quarterly GDP at factor cost at constant (1999-2000) prices for Q1 of 2007-08 is estimated at Rs 7,23,132 crore, as against Rs. 6,61,335 crore in Q1 of 2006-07, showing a growth rate of 9.3 per cent over the corresponding quarter of previous year.

The economic activities which registered significant growth in Q1 of 2007-08 over Q1 of 2006-07 are, manufacturing, electricity, gas & water supply, construction, trade, hotels, transport and communication, financing, insurance, real estate and business services, and community, social and personal services.

According to the information furnished by the Department of Agriculture and Cooperation (DAC), which has been used in compiling the estimate of GDP from agriculture in Q1 of 2007-08, the crops rice, wheat, coarse cereals and pulses during the Rabi season (which ended in June, 2007) of 2006-07 recorded growth rates of (-) 6.4 per cent, 8.0 per cent, 17.1 per cent, and 11.4 per cent, respectively over the corresponding season in the previous agriculture year. Among the commercial crops, the production of oilseeds declined by 11.3 per cent during the rabi season of 2006-07, while the production of cotton and sugarcane recorded growth rates of 22.7 per cent and 22.8 per cent, respectively during the agriculture year 2006-07.

According to the latest estimates available on the Index of Industrial Production (IIP), the index of mining, manufacturing and electricity, registered growth rates of 3.2 per cent, 11.9 per cent and 8.3 per cent, respectively during Q1 of 2007-08, as compared to the growth rates of 3.6 per cent, 11.7 per cent and 5.3 per cent in these sectors during Q1 of 2006-07. The key indicators of construction sector, namely, cement and finished steel registered growth rates of 6.8 per cent and 7.7 per cent, respectively during Q1 of 2007-08, as against the growth rates of 10.2 per cent and 10.3 per cent, respectively in Q1 of 2006-07.

Among the services sectors, the key indicators of railways, namely, the net tonne kilometers and passenger kilometers have shown growth rates of 2.6 per cent and 5.1 per cent, respectively during Q1 of 2007-08. In the transport and communication sectors, the production of commercial vehicles, cargo handled at major ports, cargo handled by the civil aviation, passengers handled by the civil aviation and the total stock of telephone connections (including WLL and cellular) registered growth rates of 6.6 per cent, 14.3 per cent, 11.6 per cent, 21.8 per cent and 47.0 per cent, respectively during Q1 of 2007-08 over Q1 of 2006-07. The other key indicators, namely, aggregate bank deposits, and bank credits have shown growth rates of 26.1 per cent, and 25.9 per cent, respectively during Q1 of 2007-08 over Q1 of 2006-07.

Source: The Press Note of PIB dated 31-08-2007

Tentative Interview Dates - Class of 2009

As per the website of ISB, the tentative interview dates are as follows

Cycle-1

Pune - 25 - 27 October, 07
Chennai - 25 - 27 October, 07
Kolkata - 26 - 27 October, 07
New Delhi - 30 October - 03 November, 07
Bangalore - 22 - 24 November, 07
Mumbai - 15 - 17 November, 07
Hyderabad - 05 - 30 November, 07
International - 05 - 30 November, 07

Cycle-2

Pune - 21 - 22 December, 07
Chennai - 27 - 29 December, 07
Kolkata - 28 - 29 December, 07
New Delhi - 01 - 05 January, 08
Bangalore - 09 - 12 January, 08
Mumbai - 16 - 19 January, 08
Hyderabad - 20 - 31 January, 08
International - 20 - 31 January, 08

These are tentative dates and are subject to change without any notice in view of circumstances beyond Adcom control. Decision of the Admissions Committee is final. Interview calls are usually emailed a week prior to the interview dates.

All the best for the Class of 2009

Want big bucks? Try the realty sector

The following is the gist of article published by rediffnews.com on the emerging career opportunities in the real estate sector.

In the back drop of DLF raising India's biggest IPO, the Bombay Stock Exchange introducing an index for it, with foreign investment of $10 billion is expected to flow into the sector over the next 12-18 months and with the sector growing at 30-plus per cent in the next few years, the realy sector is slowly on its way towards consolidation and transparency.

The growth potential of real estate is immense for people looking to make a career in it. Among college students, graduates and working professionals -- especially those with management, engineering and architecture backgrounds -- realty studies are fast becoming a favourite.

Enrolments are increasing in institutes offering short-term diploma courses as well as in colleges offering real estate specialisation in their Master's programme. P.S.N. Rao, professor at the SPA, says that on an average 20 of the 75 students from the Masters in Planning program choose to do a thesis on real estate. "This figure was negligible when the course was introduced as an elective 10 years ago," he adds.

Dedicated institutes have sprung up and management schools have introduced specialised courses on the subject to cater to the increasing demand. Indian School of Business (ISB), Hyderabad, launched a course titled 'Property Finance and Investment' last year. The Pune-based Indian Institute of Real Estate (IIRE), affiliated with the National Association of Realtors (NAR), a leading association of realtors in the US, had 10 students when it was launched in 2001. "Today, we get more than 3,000 enquiries per month for our online course," says Suresh Malkani, founder and academic dean, IIRE.

A number of real estate MNCs have already set up shop in India; more are following suit. Home-grown firms, too, are joining the fray, pushing up the demand for qualified personnel. "There is an immense dearth of trained manpower in this sector," says Nirmal Purushottam, principal, Yajnas Academy of Real Estate Management, Hyderabad. His views are backed by Haresh Motirale, senior manager, marketing and sales, G:Corp Properties, Mumbai, who completed a course from the IIRE in 2002. "A specialised course definitely gives you an edge over those who haven't done it," he says.

Besides the technical essentials, realty education focuses on management studies. "Realty management courses give students a managerial perspective and help them understand finance and marketing," says Purushottam. Industry watchers say the day is not far when campus recruitments will become the norm in the real estate sector. "Our students are posted in companies like Tischman Speyer, JLLM and Macquarie Group," says Bhuvana Ramalingam, director (communications), ISB. "They are offered positions like general manager and senior manager."

Consider Delhi-based Anu Punj, 23, a graduate from the SPA with specialisation in Housing. She was snapped up immediately after her course by Emmar-MGF, a leading realty MNC. She is working as an assistant manager (planning) in the firm now.

Master's courses are generally comprehensive, covering several aspects related to housing and real estate. Says Madhu Bharti Sharma, head of the Department of Housing at CEPT, "The Programme of Planning, with Housing as a specialisation, covers housing policy, housing requirement, housing finance, land economics, real estate development and various methods of development (commercial, residential, resorts and leisure)."

Expect five-figure salaries at the entry level. As the property market gets more organised and competition intensifies, the figures are bound to get better.

The ISB, in partnership with two London-based schools, has instituted the country's first Research Chair in Real Estate and Urban Studies, besides forming a Real Estate Club to promote realty education.

Full Article:-

Want big salaries? Try the realty sector - Rediff News - September 07, 2007

India tops the Forbes Asia-Pacific Fabulous 50 List with 12 companies

Forbes has announced the Asia Fab 50 list for 2007. The 3rd Annual Fabulous 50 list the most best of biggest listed companies from the Asia-Pacific region. Acer from Taiwan has topped the list, with Indian companies Bharat Heavy Electricals (BHEL) and Bharti Airtel at the 2nd the 3rd slots respectively. Bajaj Auto Limited which figured in the list in 2006 at the 2nd position has failed to make it as one of the fabulous 50 companies of the region, whereas the public sector heavy electricals giant of the country, BHEL has jumped up 2 slots to replace Bajaj as the second most fabulous company in the Asia Pacific region for this year. Two companies from the TATA group are on the list - TCS at #40 and Tata Steel at #41. Twelve companies in the list are of Indian, the largest representation by any country. 10 companies are on the list from Taiwan, out of which Acer has occupied the first slot. China has been placed third with seven businesses including China Mobile and Lenovo Group.

"With a relatively young population of 1.1 billion, India has its own huge market," the US magazine said.

"Companies such as ICICI Bank, HDFC Bank and Bharti Airtel are growing fast by reaching out to the country's rural customers, not to Western markets."

Other companies on the list include some of Asia's most well-known brands such as Hong Kong carrier Cathay Pacific Airways and video game console maker Nintendo of Japan.

Methodology:-

To compile list, Forbes looked at long-term profitability, sales and earnings growth, stock price appreciation and projected earnings for every company in the region with revenues or market capitalization of at least $5 billion.

Waiting in the Wings:-

As per the Forbes website, if the recent results continue, Kotak Mahindra Bank and Suzlon Energy from India may contend for the Fab 50 list next year. Please watch out.

Complete Report : Forbes Third Annual Asia Pacific Fabulous 50 - 2007

The Fabulous 50

1. Acer
2. Bharat Heavy Electricals
3. Bharti Airtel
4. BHP Billiton
5. Brambles
6. Cathay Pacific Airways
7. Chi Mei Optoelectronics
8. China Minsheng Banking
9. China Mobile
10. China Shenhua Energy
11. CNOOC
12. Compal Electronics
13. Daewoo Shipbuilding & Marine
14. Delta Electronics
15. Doosan Infracore
16. Esprit Holdings
17. Formosa Petrochemical
18. Grasim Industries
19. HDFC Bank
20. Hon Hai Precision Industry
21. Ibiden
22. Icici Bank
23. Infosys Technologies
24. IOI Corp
25. Larsen & Toubro
26. Leighton Holdings
27. Lenovo Group
28. LG Corp
29. Li & Fung
30. MediaTek
31. Minmetals Development
32. Neptune Orient Lines
33. Nintendo
34. Noble Group
35. Pou Chen
36. Reliance Industries
37. Satyam Computer Services
38. SembCorp Industries
39. Taiwan Semiconductor Manufacturing
40. Tata Consultancy Services
41. Tata Steel
42. Telekomunikasi Indonesia
43. Toll Holdings
44. Toyota Boshoku
45. Wipro
46. Wistron
47. Woolworths
48. Wuhan Iron & Steel
49. Yahoo Japan
50. Yamada Denki

Related Articles:-

• The Fab 50 - On Top - Forbes.com - September 07, 2007
• With 12 firms, India tops Forbes list of Asia's Fabulous 50 - earthtimes.org - Sept. 7, 2007
• India dominates Forbes regional list - Business Report - Sept. 7, 2007
• 12 Indian cos in 3rd Forbes Asia Fabulous 50 List - The Economic Times - Sept. 6, 2007

Inflation rate comes down to 3.79% for the week ended 25th August

The official Wholesale Price Index for 'All Commodities' (Base: 1993-94 = 100) for the week ended 25th August 2007 rose remained unchanged at its previous week level of 213.6 (Provisional).

The annual rate of inflation, calculated on point to point basis, stood at 3.79 percent for the week ended 25/08/2007 (over 26/08/2006 ) as compared to 3.94 percent (Provisional) for the previous week. The annual rate of inflation stood at 5.27 percent as on 26/08/2006 i.e. a year ago. The annual rate of inflation declined due to the larger base of last year.

The index for 'Food Articles' group declined by 0.2 percent to 223.3 (Provisional) from 223.7 (Provisional) for the previous week due to lower prices of maize, fish-marine, wheat and fruits & vegetables (1% each). However, the prices of moong, condiments & spices and eggs (1% each) moved up.

The index for 'Non-Food Articles' group rose by 0.1 percent to 209.9 (Provisional) from 209.7 (Provisional) for the previous week due to higher prices of sunflower (5%) and raw cotton (3%). However, the prices of raw rubber (11%), raw silk (4%), castor seed and soyabean (2% each) and rape & mustard seed, copra and raw jute (1% each) declined.

Central Statistical Organisation revises it inflation figures after two months of releasing the provisional figures. For the week ended 30/06/2007, the final wholesale price index for 'All Commodities’ (Base: 1993-94=100) stood at 212.8 as compared to 212.5 (Provisional) and annual rate of inflation based on final index, calculated on point to point basis, stood at 4.42 percent as compared to 4.27 percent (Provisional) reported earlier.

However, Union Finance Minsiter, Mr. Chidambaram told reporters that outlook on inflation is of caution, given that international crude oil prices have reached 74 dollars per barrel.

Related Articles:-

• Inflation drops to 16-mth low at 3.79% - The Indian Express - September 08, 2007
• Inflation hits 16-month low of 3.79% - The Economic Times - September 08, 2007
• Inflation down to 3.79 pc, FM expresses caution on crude - The Hindu - September 07, 2007
• FM presses caution button on oil prices - Hindustan Times - September 08, 2007
• Inflation falls to 3.79% - Rediff News - September 07, 2007
• Hike in petrol, diesel prices likely - Central Chronicle - September 08, 2007

Talent Crunch Hits HR while the role of HR is also transforming

Amid the issue of overall talent crunch in skilled manpower, the real challenge facing before India Inc. - the shoratge of HR professionals. Industry estimates show that for every 50-75 people recruited, one HR job is created. However, comapred to the jobs being created each year, the number of HR professionals seems minuscule.

In 2007 alone, approximately 3,37,000 employees are expected to join the software and services sector, for which around 4,500 HR professional will be required. However, there are only handful of institutes that offer exclusive courses in HR, of which Tata Institute of Social Sciences(TISS), XLRI and SCMHRD are most popular. These three institutes put together produce approximately 200 students each year. This supply-demand mismatch in the IT sector alone is indicative of the larger picture. Experts say India will require 28,000 competent HR professional next year, but there seems to be little happening on the supply side.

The industry attribute the shortage to mindset issues. Students prefer specialisations in finance and marketing over HR, as Management trainess at the first level in HR get comapred to their counterparts in finance and sales department and the main reason being the lack of recognition.

Another issue is the increased level of attrition in HR. Addressing the issue of ‘Managing Attrition & Aspirations’ at two-day International Management Institute (IMI) HR Summit on August 30, Rachna Bhanot, Head (Strategic HR), IBM Daksh said, “Attrition is the result of lack of alignment of various aspirations of industry, organization and individual. So there is a need for alignment between aspirations of these three stakeholders to get a win-win situation… The role of HR managers is now changing from personnel management to talent management where they manage competency, succession and performance.” The two-day summit was centered on the theme ‘Managing Talent for Global Competitiveness: Issues and Challenges’.

The two day HR Summit also saw an Inter B-School paper competition on the issues of ‘Taking HR from the Backroom to the Boardroom’, ‘Attrition: A Blessing in Disguise?’ and ‘Does the IT/ITeS industry need Unions?’ IMI short-listed the teams for the final round out of 156 entries from different business schools. On the occasion, papers were presented by the teams including the Indian Institute of Management (IIM), Kozikode; Indian School of Business (ISB), Hyderabad; Indian Institute of Foreign Trade (IIFT), Delhi; Institute of Rural Management Anand (IRMA), Gujarat; and International Management Institute (IMI), Delhi.

Sangeeta Sabharwal, CEO of executive search firm, Confiar India, in her address at HR Summit, said that the role of HR professionals was next only to the CEO’s role in importance. Elaborating on HR’s role, Ms Sabharwal said, “Earlier it was finance and marketing that was next to CEO’s role but it’s HR now.” She was of view that the role of HR is now more than only tackling personnel and emotional issues: HR must deal with the much bigger issue of managing talent. “Human capital is increasingly becoming the source of value creation for organizations so it is very important to mange the talent.”

The buzzword ‘Outsourcing in recruitment process’ was another issue that got attention during the panel discussion. While addressing the issue, Mr Amitava Saha, Head (Talent Acquisition) First Source, said, “There is abundant talent but not enough to match up to the increasing number of jobs which leads to Recruitment Process Outsourcing (RPO). Outsourcing is spreading like a virus in India and our country is a preferred destination for RPO.” On the other hand outlining the future of RPO, Mr Rajiv Gupta predicted that, “India will lead the global RPO industry and an Indian RPO provider will be among the top three global RPOs by 2012.”

Closing the session, IMI Director Dr C S Venkata Ratnam in his concluding message highlighted the need to hire and integrate the talent of different skills. He said, “While hiring talent companies face lots of conflicts and to reduce these conflicts companies need to hire people with different skills. So don’t hire the clones. I think the role of a manager is similar to a conductor of an orchestra, where different kind of talents and instruments integrate with perfect harmony to create melodious music.”

Related Articles:-

• IMI HR Summit: HR leaders debate on attrition management and employee engagement - mbauniverse.com - August 31, 2007
• IMI HR Summit: “It was finance and marketing that was next to CEO, but now it’s HR,” says Sangeeta Sabharwal, CEO, Confiar India - mbauniverse.com - September 01, 2007

Indian GDP grows at 9.3% during April-June of 2007

Continuing the upswing on the strength of the good showing by manufacturing sector, the economy grew by 9.3 per cent during the April-June quarter of the current financial year, when comapred to 9.6 per cent recorded during comparable period last year. India continues to be the second fastest growing economy after China which grew by 11.5% over the same period. India is now a $1 trillion economy after a growth spurt in the past four years second only to China's hot pace of expansion among major economies.

The highlights of the growth story are

• The manufacturing sector grew by 11.9 per cent which is lower than 12.3 per cent recorded during the first quarter of 2006-07.
• The services sector too maintained double digit growth, as demand, in particular, for telecommunications services, residential apartments and office space, air travel and financial services continued to rise. Trade, hotels, transport and communication registered a growth rate of 12 per cent. And, maintaining the trend seen in recent years, “trade, hotels, transport and communication” accounted for a fourth of the GDP (26.8%).
• Growth in agriculture, forestry and fishing was 3.8 per cent, compared to 2.8% in the same period last year. That notwithstanding, the share of agriculture in the total domestic output continues to decline. Indeed, the value of output of “agriculture, forestry & fishing” declined to 17.7% in the quarter under review, from 18.6% in the corresponding period of 2006-07.
• Mining and quarrying sector grew by 3.2 per cent.
• Finance, insurance, real estate and business services grew at 11 per cent during the quarter.
• The wholesale price index for food articles, fish, minerals, manufactured products, electricity and all commodities has risen by 8 per cent, 3.4 per cent, 13 per cent, 5.7 per cent, 2.4 per cent and 5.4 per cent respectively during the quarter.
• The consumer price index for industrial workers rose 6.3 per cent in the quarter.

The forecast for full year remains largely optimistic: finance minister P Chidambaram expects growth in the full year to be 9%, making it third successive year of about 9% growth. His argument being that growth has been driven by domestic consumption and investments. In the coming months, however, economists expect the growth rate to dip a little and close the year around the 9% mark. The Reserve Bank of India, in contrast, is relatively conservative, maintaining that the real GDP growth this fiscal would be 8.5%.

Related Articles:-

• Good so far... - The Economic Times - 04-09-2007
• Flying Economy: GDP grows 9.3% - The Times of India - 01-09-2007
• India's GDP grows 9.3% in Q1 - Rediff News - 31-08-2007
• India shines: April-June GDP grows 9.3 per cent - The Economic Times - 31-08-2007

Corporate India attracts IAS talent pool - a degree from IIT, IIM or ISB an added advantage

This is an article published in The Economic Times on September 02, 2007 regarding the reverse drain of talent from the Government's prestigious service IAS (Indian Administrative Service) to the private corporate sector. The main reason are high disaprity in pay between government and private sectors in recent years, low recognition and inability of the Government to encourage the talent, uniform rules for promotion independent of their ability and skills and last, but not the least, not enough job satisfaction.

In this reagrd, I want to tell my story. I have completed my B.Tech in Electrical Engineering from IIT, Kharagpur in the year 1993, when the IT boom has just started. I got a campus offer in TCS, but I denied the offer and joined as Technical Officer in ECIL (another campus offer) in Hyderabad so that I can prepare for civil services. The salary offered at TCS was around Rs. 8,000 p.m., in ECIL I used to get around Rs. 5,500 p.m. in the year 1994 and when I joined as Assistant Commissioner of Income Tax (ACIT) in the Indian Revenue Service (IRS) in 1997, I used to get around Rs. 8,000 p.m i.e. the parity between the I.T. sector and government salary in late 90s was almost 1:1 or 1:2 at maximum. Now, if you take the reccent salaries of fresh graduates from IITs, they are hovering around Rs. 15 lakhs per year on an average, where as now the entry level salary for an IRS officer is around Rs. 2 lakh per annum, making the ratio at almost 1:15. Now, you see the glaring disparity between the government salary in All India and Central Services, recruited through a rigorous and year long process through Civil Services Examination, conducted by UPSC , followed by interview, attracting the best talent in India.

Indian corporates have started discovering a huge talent pool — the coveted Indian Administrative Service (IAS). In fact, more and more mid-career IAS officers have been abandoning their white ambassador cars to jump into the private sector bandwagon as companies such as Reliance Industries, GMR Group, DLF, McKinsey, PricewaterhouseCoopers (PwC), Infrastructure Development Finance Company(IDFC) etc. are wooing the government babus to handle key projects.

Unlike the earlier recruits, the officers who have recently been hired with fat pay packages of Rs 50 lakh to Rs 3 cr per year, are not assigned mere liaison work with the government, but are asked to carry out difficult project implementation tasks.

What’s more, the officers with IIT and IIM backgrounds, or those with specialised degrees from foreign universities have a clear edge to grab opportunities at the private sector.

Whereas Assam cadre IAS officer O P Agarwal of the 1979 batch joined IDFC in August this year, Dhiraj Mathur, an MP cadre officer, is joining PWC this September. Significantly, Mr Agarwal who served as a joint secretary in urban development ministry till recently, completed his masters in transport from MIT.

Rajkamal, a 1994 batch Chhattisgarh cadre IAS who completed his MBA from Indian School of Business, Hyderabad, resigned from the service to join McKinsey. A Gujarat cadre IAS officer Jayant Parimal recently joined Reliance Industries. A 1986 batch West Bengal cadre Ravi Kant, who holds a degree in civil engineering from IIT Roorkee and masters degree in economics from University of Manchester, UK, joined Ramky Group. He is now the MD of one of the group companies — Ramky Enviro Engineers.

Significantly, the buzz is that many IAS officers who are either on deputation with private companies or on long leave, may quit the services soon, SundayET has learnt. It’s also learnt that Anil Kumar Kutty, a joint secretary in the ministry of power, has received an offer of Rs 1.5 cr per year from a power company. Mr Kutty, who has been on leave for the last two years, could not be contacted. Not all of them need to quit.

Some of them even go to private companies on deputation. A Kerala cadre IAS from 1992 batch Sanjeev Kaushik, who holds an MBA degree from London Business School, has taken leave from the government to work with Lehman Brothers.

Inflation Trends During the Current Fiscal

Based on the statistics provided by the official website of Central Statistical Organisation, I have prepared the following graph indicating the Annual Rate of Inflation based on point-to-point basis or year-on-year basis. For Example, the inflation rate for the week ended 16/06/2007 is calculated by considering the Wholesale Price Index (WPI) for all commodities as on 16/06/2007 (211.90) and corresponding figure a year back i.e. on 17/06/2006 (203.50), by calculating the percentage increase of the WPI over the year at 4.13 percent [(211.90-203.50)/203.50*100] and by rounding off (and not truncating) the result into two decimal points.

If you see the trend in inflation, the rate of inflation has been declining from the beginning of the current fiscal till 16/06/2007, before being range bound between 4 to 4.50 percent, thanks to various credit squeezing measures taken by RBI. The major contributor to inflation is the rise prices of food articles, which hits every common man. Hence, it is all the more important to contain the inflation. With the second real estate boom on the corner, with agriculture becoming unviable due to high prices of land combined with the shoratge of agricultural labour force, with the reducing return on agriculture invetsment and with the rising cost of living, the acreage under vegaetables and fruits is declining in Telgana region of Andhra Pradesh. Similar may be the scenario in all other states. If this continues, there is no surprise that the prices for vegetables, fruits, diary products and other essential agriculture prducts will rise.

The RBI wants to keep the inflation rate below 5 percent during the current fiscal. Its medium term objective is to reduce the inflation to 4-4.50 percent on sustained basis, as per the economic outlook report of the RBI rleased on August 31, 2007. The RBI has raised the Prime Lending Rate (the benchmark lending rate), Cash Reserve Ratio and Reverse Repo Rate (the rate at which the banks lend from RBI for shortage of short term funds) during the current financial year to suck the excess liquidity out of the system as well as to reduce the money supply in the market. It has also cautioned the banks to go slow on their lending spree for high risk areas like real estate and reatil sectors. The press release of RBI's Annual Report 2006-07 says "On the sources side, growth of bank credit remained high, although there was some moderation. Demand for bank credit was largely broad-based with agriculture, industry and personal loans absorbing 14 per cent, 36 per cent and 24 per cent, respectively, of incremental expansion in overall non-food credit during 2006-07. Growth of credit to sectors such as real estate remained high, albeit with some moderation. In order to maintain asset quality, the Reserve Bank further tightened the provisioning requirements in respect of sectors witnessing high growth in credit".

The Government also took various fiscal and supply-side measures to contain inflation during the latter part of 2006-07. These measures taken by the Government and RBI contained inflation to a certain extent. With the Indian economy integrating with world economy, with Indian economy's robust growth attracting foreign inflows, it becomes difficult to contain inflation with the monetary measures alone. We have to effectively manage startegies for supply side managment of inflation by increasing the productivity of our industry, encouraging imports and also transforming to full capital account covertibilty gradually so that our foreign inflows and foreign exchange reserves are utilised properly to control inflation and rupee appreciation.

Inflation declines to 3.94% for the week ended 18th August, 2007

The official Wholesale Price Index for 'All Commodities' (Base: 1993-94 = 100) for the week ended 18th August 2007 rose by 0.1 percent to 213.6 (Provisional) from 213.4 (Provisional) for the previous week.

The annual rate of inflation, calculated on point to point basis, stood at 3.94 percent for the week ended 18/08/2007 (over 19/08/2006 ) as compared to 4.10 percent for the previous week. The annual rate of inflation stood at 5.12 percent as on 19/08/2006 i.e. a year ago. The annual rate of inflation declined due to the larger base of last year. In fact, the index for 'food articles' has increased by 0.9% due to higher prices of fish-inland (5%), masur (2%) and milk, fruits & vegetables, bajra and gram (1% each). The index for manufactured items has declined by 0.1% during the week.

Central Statistical Organisation revises it inflation figures after two months of releasing the provisional figures. For the week ended 23/06/2007, the final wholesale price index for 'All Commodities’ (Base: 1993-94=100) stood at 212.4 as compared to 212.0 (Provisional) and annual rate of inflation based on final index, calculated on point to point basis, stood at 4.32 percent as compared to 4.13 percent (Provisional) reported earlier.