Category: News And Views

The portal allows potential entrepreneurs to do most of the formalities online — submitting forms, making payments, among others. They can also track the status of their requests through the portal.

However, the ministries crucial for clearance of projects like the Ministry of Environment & Forests (MoEF) are yet to become part of the project, raising questions on how the hassles in doing businesses would be addressed.

Launching the project, commerce and industry minister, Anand Sharma, said his ministry would soon approach the Cabinet Committee on Infrastructure (CCI) to bring resisting ministries such as the Ministry of Environment & Forests (MoEF), on board.

The project, which was supposed to have been launched in August 2013, is facing stiff opposition from the Central Board of Excise and Customs and the Central Board of Direct Taxes, apart from MoEF.

The eBiz project, first announced in 2009, looks to improve the country’s ease of doing business quotient. According to a recent World Bank ranking, India stood at 134th among 189 countries in terms of ease of doing business.

A commerce ministry statement said the eBiz platform enables a transformational shift in the government’s service delivery approach from being department-centric to customer-centric.

The first phase of the project, which provided information on forms and procedures, was launched on 28th January, 2013. The second phase, launched on Monday, has added two services from the Department of Industrial policy and Promotion – industrial licences and industrial entrepreneur’s memorandum – along with operationalising the payment gateway by the Central Bank of India.

The government has inked a 10-year contract with Infosys Ltd., where a total of 50 services (26 central + 24 states) are being implemented across five states – Andhra Pradesh, Delhi, Haryana, Maharashtra and Tamil Nadu – in the pilot phase. Five more states – Odisha, Punjab, Rajasthan, Uttar Pradesh and West Bengal – are expected to be added over the second and third years.

According to Raghupathi C. N., head of India business at Infosys, the project is slightly delayed due to several departments’ resistance to change. “The project is slowly nibbling away at the resistance; some stability in the political environment is also expected to improve the situation.”

Raghupathi said the departments are used to running their services in the offline and manual way for several decades now. He said the implementation is “slower than expected” because it is tough to expect departments to completely change their modus operandi overnight. “While there are some easy adopters, there are others who clearly do not see the benefit of it.”

The portal will not only create a single-window for all registrations and permits, but will also provide investors with a checklist.

“So far, there was never a checklist, and people were forced to go from department to department filling forms, never knowing what was remaining,” said Raghupathi. “Only 50-60 % of the services were digital, everything else was manual,” he added.

The government hopes to bring online over 200 services related to investors and businesses over the next 10 years on the portal.

Such arguments aim at browbeating all sitting judges. All sitting judges will be retired judges one day. Any possibility of fear instilled in the mind of a sitting judge would be dangerous for the system. All sitting judges have an obligation to maintain the independence of the judiciary at all costs.

It can be nobody’s case that an errant judge — sitting or retired — ought not to be dealt with appropriately. But can a belated one-sided allegation, howsoever grave the allegations, made before a forum not competent to deal with the same, seek a mob-lynch verdict? In Justice Ganguly’s case, the Supreme Court recorded what it did, based only on the allegations levelled by the complainant.

I do not think the Supreme Court committee gave any finding. If the full Supreme Court has decided not to entertain any such complaint in the future, that must be respected. Perhaps the full court’s decision is an admission that such a complaint ought not to have been entertained in the first instance. Indeed, the apex court cannot be converted into an investigating machinery or a prosecuting agency of the state.

Nothing definite can be stated on the allegations without a trial. And a trial has to be in a competent court of law, arising out of an FIR. Let me not be too legalistic about the scope, purport and ambit of amended Sections 354A, 354B, 354C, 354D of IPC, hurriedly enacted without debate in the aftermath of the Nirbhaya crime.

Today, questions are being raised as to the wisdom of enacting such lethal provisions. I don’t know whether this would have the desired effect. What I apprehend, however, is that some innocent persons may possibly be made victims of the law, either deliberately or otherwise.

Law, as Samuel Johnson said, is the ultimate result of human wisdom, acting upon human experience, for the benefit of the public. I am not convinced that the amended IPC 354 satisfies the test of law laid down by the British statesman. What we need is justice, and not addition to a plethora of extant laws. We also need honesty of purpose on the part of those administering the law. In India we have too many laws but very little justice.

And about justice delivered by the administrators, less said the better. Curiously, both the accused judges have always enjoyed great reputation of judicial independence. It is too much of a coincidence that such judges, with a tremendous reputation of judicial impartiality, should have been accused of wrongdoings in discharge of non-judicial function. The Supreme Court of India has been an inconvenient institution to the powers that be. There can possibly be a larger conspiracy to belittle and downgrade the Supreme Court, which is by far the best functional institution of India today.

The faith of the common man in the Supreme Court has remained undiminished despite motivated attacks made from various quarters. The Bar has an overriding responsibility to protect the majesty and dignity of the judiciary.

Let the law take its own course for any allegations levelled against judges. There are proper fora for ventilating grievances for every aggrieved person. Anyone can file an FIR against any person and the police has no choice but to investigate impartially and take the matter to its logical end. But to attempt to burden our Supreme Court to deal with individual complaints would be against the very basic tenets of the rule of law.

Despite allegations levelled against judges, the Supreme Court remains a shining example of rectitude, independence and impartiality. Let us not attempt to destroy the last bastion of hope for the common man. Let us not destroy our democracy!

The story is no better on the placements front. All the new IITs put together achieved a relatively low placement figure of 79%-92%. At many IITs, students were given job offers for a salary as low as Rs. 3.5 lakh per annum, which is below the minimum annual pay package of Rs. 4 lakh even at some National Institutes of Technology (NITs). And in spite of all their chest-thumping, even their older peers have lost a lot of sheen. For example, they have failed to make the grade among top institutions in both the Times Higher Education and the QS World Asian University rankings. The lacklustre rankings reveal, yet again, that Indian universities fail, for most part, to offer world-class education, training and research-based knowledge creation. There are financial issues as well. Setting up a new institute of national importance would cost the government upwards of Rs. 250 crore without the land cost. If this money is pumped instead into improving the quality of existing institutions or is provided to them to hand out more attractive salaries to faculty members, much more can be achieved. The last one is the key, since even at the old IITs, 41% of teaching posts are vacant. One way to raise the bar on quality education at the new IITs is to bring in top-notch faculty, but that is easier preached than done. A typical IIT assistant professor starts at about Rs. 75,000 a month – less than what many engineers from Tier II colleges get as their first pay cheques. The irony is that even trainers in some coaching centers for joint entrance examination for admission to IITs make six times as much, if not more.

A push towards research is another way to counter the faculty shortage. The Anil Kakodkar Committee of 2010, in its strategic recommendations for the IITs, set a target of 10,000 doctoral fellows being produced annually by 2020-2025, up from the current 1,000. The hope was that some of these PhDs would stay to teach at the IITs. But at present, half  of the PhDs leave academics to join industry for better pay. The IIMs, which account for only 3% of India’s output of management students, are facing similar challenges. Autonomy, availability of more resources and enabling better-quality faculty are the key needs of the country’s showpiece institutes. That, rather than mere geographical expansion, would be a better option.

(Source: Business Standard, dated 21-01-2014)

But if all of this sounds like a full-time job for one person in one company, consider also that independent directors are permitted to join a maximum of 10 boards. At this maximum, and given that an independent director is required to attend at least four meetings a year, he or she could end up attending at least 40 meetings a year. If that sounds doable over 12 months, consider that board meetings typically converge around the quarterly results announcements, which means meetings are crowded around four months of the year.

This problem is compounded by the fact that there is a chronic shortage of quality people to staff corporate boards in India – especially since the Act requires independent directors to comprise a third of the board in listed companies. As a result, a few good men and women end up serving on eight to 10 boards. Given that there are 850,000 companies in India, according to Corporate Affairs Minister Sachin Pilot, many of them family-managed, it would probably be helpful to the cause of corporate governance if the maximum limit were, say, halved. In the US, for instance, where governance may not be perfect but the norms for it are more stringent than those in India, most board members do not serve on more than three boards (Rajat Gupta being a notable exception that provided a salutary lesson on the dangers of multiplicity). This may exacerbate the shortage, but it will force companies to widen the pool from which to draw.

One way of attracting more talent (and surely there is no shortage of that in India) could be to liberalise the fee structure, linking it to profit or turnover, in the same manner as CEO fees, and reintroducing stock options, a move that would go a long way towards helping start-ups. Either way, a more realistic approach is urgently needed so that independent directors become genuine custodians of corporate governance.

According to a study by London-based Brand Finance, these intangibles account for almost twothirds of the value of the top 5,000 listed companies across markets. So obviously, anything that impacts the value of such intangibles has a huge bearing on business strategy, and therefore cannot be swept under the carpet. Firms challenge claims and damages to their intangibles, whether it is a breach of intellectual property or misuse of brand names by business rivals and outsiders. Why should brand sabotage from within be any different?

Two, celebrities have a huge following, and willynilly consumers see them as the personification and custodian of the brand they endorse. Elsewhere, if a celebrity breaches his or her public persona, invariably the brand suffers and marketers are quick to dissociate the brand from the endorser. And they are able to do it because the contracts explicitly spell out such separation conditions. In contrast, marketers in India are often seen to be drawing soft contracts with celebrities that enable them to be less responsible towards the brand and its ethos. The dangers are obvious. Experience from developed markets like the US or European countries points to more robust celebrity contracts that bind them to ‘good brand practices’ long after the cheques stop coming. Needless to say, everyone is entitled to her views. But if you’re an important cog in an enterprise’s value chain, there cannot but be costs and consequences of any viewpoint that has a bearing on the enterprises’ value. For transnationals like Pepsi, with headquarters in one continent, manufacturing in another, and customers in yet another, the glue that binds them comes from intangibles like intellectual property and brands. Any assault on them, by design or default, has to be dealt with firmly.

There are several drivers for externalisation. First, it moves the businesses away from Indian tax and regulatory challenges into jurisdictions that may be more conducive from an operational standpoint and also substantially mitigates tax leakage and regulatory uncertainty. Unwritten prohibition on ‘put options’, retroactive taxation of indirect transfers, introduction of general anti-avoidance rules fraught with ambiguities, etc., are a few examples why Indian companies may want to avoid direct India exposure.

Second, from a fund raising perspective, it offers Indian companies to connect with an investor base that understands their business potential and, thus values them higher than what they would have otherwise been valued at in domestic markets. Infosys, Wipro, Rediff, Satyam are classic examples of companies which preferred to tap the global capital markets (NYSE and Nasdaq) without going public in India.

Third, with the Indian currency oscillating to extremes, one of the biggest concerns for foreign investors is currency risk. By investing in dollars in the offshore holding company (OHC), foreign investors can be immune from the currency risk and benefit from the value appreciation of the Indian companies. Many foreign investors that invested in 2007 when the Rupee was at around 42 to a dollar have suffered substantially with the Rupee now being at 62 to a dollar.

Fourth, and this is more of a recent issue, with the coming of the new Companies Act, 2013, which provides for class-action suits, enhanced director liability, statutory minimum pricing norms (beyond exchange control restrictions), there will be keenness to flip the structure to an OHC and ring-fence potential liabilities under the Companies Act, 2013.

Lastly, such offshore jurisdictions also provide for great infrastructure and governmental policies that are discussed with businesses and are more closely aligned to growth of the businesses as against meeting revenue targets. With most clients offshore, there may be certain amount of snob value that may be associated with establishment in such offshore jurisdictions.

Indian tax and regulatory considerations play a very important role in externalisation. From a tax standpoint, flipping the ownership offshore may entail substantial tax leakage, and to that extent it is advisable if the flip is undertaken at early stages before the value is built up in the Indian asset. Another challenge from a tax perspective is the choice of jurisdiction for the holding company in light of the impending general anti -avoidance rules that may disregard the holding company structure if it is found lacking commercial substance. To protect the tax base from eroding, some of the developed countries like the US have anti-inversion tax rules which deter US companies from externalising outside the US.

From a regulatory standpoint, one of the challenges is to replicate the Indian ownership in the OHC, especially since swap of shares or transfer of shares for consideration other than cash requires regulatory approval, which may not be forthcoming if the regulator believes that the primary purpose of the OHC is to hold shares in the Indian company. Indian companies may be restricted from acquiring shares of the OHC on account of the OHC likely qualifying as a financial services company and Indian individuals may be restricted to acquire shares of the OHC under the new exchange control norms since OHC will not be an operating company. The extent of operations to be evidenced remains ambiguous. OHCs acquisition of Indian shares will also need to be carefully structured as the OHC will not be permitted to acquire Indian shares at below fair market value from an Indian tax and exchange control perspective.

India has recently allowed Indian companies to directly list on offshore markets, but the conditions that such listing can only be for 51% shares of the Indian company and that the proceeds of such issuance must be used overseas within 15 days may not allow the true potential of offshore listings to be unleashed. The utilisation of the direct listing regime remains to be seen as the SEBI is yet to come out with a circular setting out disclosures required for such listing.

However, considering the challenges faced by India Inc., the need to move away from India for growth seems inevitable in current times.

The 69-year-old is an emeritus professor at the Stanford University and has served 25 years in the navy. He got the Padma Bhushan in 2010. His idea for using multiple antennas at both the transmitting and receiving stations has revolutionised wireless delivery of multimedia services for billions, said the Marconi Society.

By winning the award, Paulraj joins a select group of information technology (IT) pioneers such as Tim Berners-Lee (world wide web), Vint Cerf (internet), Larry Page (Google Search), Marty Hellman (public key cryptography) and Martin Cooper (cellphone).

N. R. Narayana Murthy, executive chairman of Infosys, said, in a release by Marconi Society, “Paulraj’s brilliance and perseverance have revolutionised wireless technology bringing a lasting benefit to mankind.”

Before Paulraj migrated to the US in the early 1990s, he was well known for pioneering the development of sonars for the navy. Paulraj is the founding director of laboratories Centre for Artificial Intelligence and Robotics, Centre for Development of Advanced Computing, Bangalore, and the Central Research Labs of Bharat Electronics.

After moving to Stanford University, he built the world’s leading research group in MIMO, and founded two companies in the Silicon Valley to develop MIMO.

While global chip maker Intel acquired a company in 2003, Broadcom Corporation bought another later.

Named after Nobel laureate Guglielmo Marconi, who invented radio, and set up in 1974 by his daughter Gioia Marconi Braga through an endowment, the Marconi Society annually awards an outstanding individual whose scope of work and influence emulate the principle of “creativity in service to humanity” that inspired Marconi.

After Sir J. C. Bose’s demonstration of the millimetre wave radio in 1895, Paulraj’s invention of MIMO in 1992 is the next major innovation in IT from an Indian-born scientist, notes IndiaTechOnline.com editor, Anand Parthasarathy. The prestigious prize includes $100,000 honourarium and a sculpture. Its honourees become Marconi Fellows.

Speaking on the topic ‘Leadership in turbulent times’ at an event organised by Great Lakes Institute of Management, he said that China would emerge as the place where a lot of different industries would be anchored from. When someone from the audience asked how long he expected the China influence to last, he replied, “You can have a lousy leader (and everything can change). We are having such a situation here in India, aren’t we?”

Charan said putting a leadership pipeline in place was critical and firms should start identifying talent early. Talent must be spotted along two lines – those who are great individual contributors and those who can be future leaders. “Both are completely different skills. Potential leaders naturally link with people to get work done for them, have a nose for making money, are highly tuned to succeed in their next-in-line jobs and can work with highly diverse sets of data. Firms can use these as indicators to identify such talent,” said Charan.

But we should hold the celebrations. First, there is a message in the failure of State Bank of India’s share issue this week. Though the asking price was modest, less than $250 million came from abroad, for an issue size that was intended to be over $1.5 billion. If the whole thing was not a fiasco, it was only because domestic public sector entities (banks and insurance) bailed in – and you can guess whether they were following orders. Bear in mind that bad and restructured loans could eventually wipe out the existing share capital of India’s government-owned banks, and they will need many billions of dollars of fresh capital. But if the largest and best of the pack can’t generate foreign investor interest, what are the others going to do? Fall back on taxpayer money at a time of fiscal stress? A financial sector that is short of capital cannot meet the economy’s credit needs, and will constrict growth. The reform of government-run banks has become essential and urgent.

Second, there is the business of government expenditure. At over 7% of gross domestic product (GDP), the fiscal deficit (for Centre plus states) is by far the largest among emerging markets. The outlook is that things may get worse, as state after state rolls back power tariffs, the cooking gas subsidy is increased, and road tolls are attacked. There seems to be an all-party consensus on more government giveaways, and implicitly therefore against fiscal correction. That this translates into higher inflation and macroeconomic instability seems beyond the ken of everyone from Arvind Kejriwal and Rahul Gandhi to Raj Thackeray. Mr. Chidambaram may do everything possible to keep this year’s deficit down to the target of 4.8% of GDP, but something that is artificially compressed by a determined minister is likely to balloon next year.

Finally, there is the business of improving governance. Aadhaar was to have been a game-changer but has been sacrificed at the altar of expediency. If unique identity numbers are not to be used for enabling cash transfers, as a superior alternative to product subsidies that are poorly targeted and prone to large leakages (and cooking gas is a prime example), what is the justification for spending many thousands of crores on Aadhaar? Talk of lack of conviction in reform! India has escaped contagion for now, but the world’s economic troubles are far from over. The antireform consensus could yet undo our future.

Not only is Satya Indian by birth, he went to ordinary schools and colleges, got to the top on his own merit and, most of all, remained a nice, normal and humble guy. We can relate to Satya and his journey in a way that we can’t relate to, say, Steve Jobs or Bill Gates, and that’s what is so inspiring. In his success, we see the possibility of our own success. At a time where young people are looking for role models to emulate, Satya is certainly a wonderful one.

Finally, there are multinationals like HUL, Suzuki and Samsung. In these firms, most important decisions are made outside India and so, a promising leader has to leave India and get back to headquarters to rise. So, it is indeed true that India is still a small pond for an ambitious and talented professional manager. Hopefully, as Indian firms globalise and professionalise and more entrepreneurial firms achieve scale, this will change. But in the short term, the best opportunities for the very best talent are still outside India. For all our complaints about the US’s restrictions on immigration of skilled workers, we ourselves remain quite closed. If we could make India a less challenging place to do business and if we could become more welcoming of high-end talent regardless of nationality, we would reverse the brain drain and become a magnet for innovators and entrepreneurs who would revitalise our economy in unimaginable ways.

Finally, does India have a competitive advantage to grow top talent? We do. First, we have the numbers. When you have so many young people, a numerically large number of us are exceptionally gifted. Second, there is a Darwinian process that results in survival of the fittest. In middle class and even poor homes, educational achievement is the passport to success, and there is pressure on kids to work hard and succeed. Our education system, with all its inadequacies, results in a hypercompetitive environment that has a way of toughening up people.

CEOs may well be India’s most valuable export. Now, what we need to do is make India more of a meritocracy – in business, education, politics and government – so that more talented people don’t just build great businesses in India but apply themselves to solving some of our toughest social, economic and political challenges. It won’t be long before we become a developed nation.

The tenure of the 15th Lok Sabha, thus, has been a disappointment. According to data released by the think tank PRS Legislative Research, the average number of Bills passed by Parliament when a Lok Sabha has completed its full five-year term is 317. The current Parliament has passed only 165, thereby torpedoing any chance of meaningful reform under the second term of the United Progressive Alliance (UPA). This is the worst performance of any Lok Sabha since the first one, which had somewhat weightier discussions to undertake. Worst of all, even those Bills that are passed are frequently passed with insufficient debate, demonstrating the degree to which political parties today have debased India’s public sphere. Only 23 % of laws passed by this Lok Sabha have been discussed for more than three hours. Ten Bills were passed in less than half an hour; as many as 20 in just five minutes. Clearly, not enough attention was paid by parliamentarians to the laws that they approved. Meanwhile, the unfinished agenda – including major anti-corruption Bills, the reform of regulatory structures, and so on – just builds up. As many as 126 Bills remain to be passed; more than half – 72 – in the Lok Sabha. Many of these Bills, which were introduced during the current tenure of the Lok Sabha, will lapse after this session, a waste of time and energy.