Saturday, August 11, 2012

Balram Singh Yadav, Managing Director, Godrej Agrovet, analyses the industry in an exclusive interview to B&E

B&E: How will the concept of Food Technology Parks as mooted in the Vision 2015 for the sector be effective in revamping and unlocking the sector?

BSY: The concept of Food Technology Park is wonderful, but it must be noted that raw material is spread over different geographies. Having Food Parks at one place may or may not work in case raw material supply chains are long.

B&E: What do you feel as a company are the major policy changes required by the government so that potential of the sector can be further opened up?

BSY: The subsidies should be increased for establishment of production units. Currently, subsidies being given are very low. The reason for increasing subsidy is to lower the breakeven for these units as value added food has long gestation period and very thin margins.

B&E: Processed food currently forms a very small percentage of India’s exports. How can this scenario be improved with India’s inherent cost advantages?

BSY: To compete in world market, we need to be competitive in cost and quality and both are also dependent on scale of operations which will come in case we can also make food processing successful for the domestic market.

B&E: As a company, how do you see the future for the sector in a 3-5 year timeline and what are the biggest opportunity areas within the sector ?

BSY: We believe that the Food Processing has a very bright future in the long run as cost of food is going up. This will require very efficient use of agricultural produce which is seasonal in nature and has very small windows of availability. The advent of modern retail and increased per capita income will make availability and affordability better.


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Friday, August 10, 2012

NITISH KUMAR, CM, BIHAR

“The state is back on track”

In an informal interview, Bihar CM, Nitish Kumar divulges the secret and extent of his success

Congratulations on receiving ‘Business Reformer of the Year’ award.

Congratulations to all of you. This award is because of the joint effort put in by the people of the state. I am just busy in bringing the system on track. This track had given way during the Lalu-Rabri misrule. I had promised that I’ll bring Bihar back to the development track. I think we have been doing remarkably on that front. But we plan for 2015. We want to see the state progress in the next 5 years.

You have received appreciation from all quarters. Even Delhi’s CM Sheila Dikshit has some good things to say about you.

That’s a pleasant surprise. I was unaware of this. I came to know this from you. I thank her for sparing such kind words for me.

The GDP growth rate is remarkable but some sectors are yet to show improvement.

There are several sectors and areas that are left. If they would have performed as per expectation, the growth rate would have been close to 20%. Agriculture and power are the two departments that have seen below-par performance. But the Centre is putting hurdles in the path. If the Centre would have wanted, there would have been investment in these two sectors, but it failed.

When investment proposals came in Thermal Power sector, the Centre did not grant permission for coal-linkage. They put a ban on drawing water from Ganges. The Ganges gets 400 cusec water at Buxar but it increases to 1500 cusec in Farraka. Now that additional water is Bihar’s property, but we were not allowed to draw water. Similarly, the centre has banned ethanol production. That was in abundance in the state. Without power, there is no chance for investment. It is difficult to run industries on diesel. It is not cost effective. Why would anybody invest then? Similarly, the electricity propelled pumps would have brought down cost of production in agriculture but we don’t have enough electricity. This can only be overcome if the Centre passes these projects.

You have said ‘All is well in Bihar’ a la 3 Idiots…

The first thing I did when I came to power was to restore law and order. The fear psychosis was out. Gone are the days when people used to huddle up in their homes even before dusk. Now you can see people roaming freely in Patna or for that matter any part of the state. The development is there for everybody to see. The image has improved outside India too.

Read more....

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Thursday, August 09, 2012

Venice of the East...

As soon as one enters Udaipur the signboards welcome one with the traditional greeting ‘Khama Ghani!’ About 400 km from the state capital (Jaipur), Udaipur is where one can expect to be treated like royalty in its luxurious hotels, and be charmed by its rural life too, and this rare mélange is perhaps what makes Udaipur the favourite destination of tourists across the globe.

The cities of Rajasthan are said to be colorful, and Udaipur is especially so as it is still inhabited by people from the Bhil tribe, and so it’s common to see men and women in angrakhas (kurta) and ghagra cholis. Not to mention the colourful festivals and fairs that are iconic of the cultural prosperity of Udaipur.

There’s nothing quite like meandering through networks of lakes, Lake Pichola and the Fateh Sagar make the city look like an artist’s canvas, while the mighty palaces, namely the City Palace and the Lake Palace, forts and the majestic havelis (Bagore Ki Haveli and Maharana Pratap Memorial) would make those history lessons at school come alive… The Lake Palace, ‘a poetry in white marble’ now converted into a heritage hotel, and Sahelion Ki Bari, the ‘garden of the maidens’, make it an experience extraordinaire. Call it the Venice of the East or The City of Lakes, the romance of Rajputana still throbs in Udaipur, even 400 years after it was founded by Maharana Udai Singh II.

Apart from being a famous marriage destination, the city also boasts of horse-back safaris and buggy, vintage car and camel rides. One can also enjoy Bhavai, Ghoomar, Kachhi Ghodi, Kalbeliya and Terah taali and other unique dances of Rajasthan here.

Savour mouth-watering Rajasthani food, seasoned with assorted spices. A meal here though is incomplete without their variety of curries, dried mango called ‘Ocra’ and beans of ‘Sangri’. The generous use of chillies makes a sumptuous feast, while the ‘Lal Maas’ here aces the “don’t miss” list.

When shopping in Udaipur, it is sinful not to take back bandhni fabrics, mesmerising wall hangings, paintings or even the traditional turban! The city’s lakes are a magical sight after the monsoon. Plan your trip from September to March; The fragrance in the air and the bird songs all work up a magic giving one the feeling of being in a fairytale place.


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Wednesday, August 08, 2012

Sack Ben Bernanke? Damn right, yes!

The decision to reappoint Ben Bernanke as the Chairman, Federal Reserve, will further escalate sloppiness, says Gyanendra Kumar Kashyap

Had it not been for old age, the octogenarian Alan Greenspan would have continued to be at the helm of Federal Reserve. Adept at the political game, Greenspan, for 18 consecutive years (August 1987 to January 2006) managed to portray an image that he was his own man and also a lickspittle of the powers in the White House. It takes no rocket science analysis to know how he got himself re-appointed and survived the times of Reagan, Bush Senior, Clinton or for that matter Bush Junior. However age had the better of Alan and a Princeton economist, Ben Bernanke, was sworn in as the Chairman of Federal Reserve on February 1, 2006. Pundits doubted Bernanke’s ability to create a cult of personality around him and become a virtual economic czar (much like his octogenarian predecessor). Thence, Ben’s August 25, 2009 reappointment came as a surprise for many who doubted Bernanke of lacking Greenspan’s mystique; Bernanke is seemingly all set to carry on the legacy of his predecessors, Paul Volcker included.

Well so much for legacy, what is worth pondering over is the question: why in heavens did President Barack Obama interrupt his vacation on Martha’s Vineyard to nominate Ben Bernanke for a second term at the Federal Reserve? Especially given the fact that August 25, 2009 and January 31, 2010 (the day when Ben Bernanke’s first term expires) are months apart? And what about all those reports that commented that Lawrence Summers – the current Director of Barack’s National Economic Council, a close confidante and also a former Treasury Secretary (during Clinton’s time) – was being considered a sureshot Fed Chairman in waiting? There, one guesses Obama called the goose before the eggs hatched. When the White House Deputy Press Secretary Bill Burton was queried, he said, “There’s been a lot of speculation out there, and the President wanted to put it to rest.” The President chose to traverse clear of Carribean waters when he said, “Ben Bernanke has led the Fed through one of the worst financial crises that this nation and the world has ever faced.

As an expert on the causes of the Great Depression, I’m sure Ben never imagined that he would be part of a team responsible for preventing another. But because of his background, his temperament, his courage, and his creativity, that’s exactly what he has helped to achieve. And that is why I am re-appointing him to another term as Chairman of the Federal Reserve.”

Critics may not exactly buy the logic – they argue (we do too) that the crisis could have been averted or at least mitigated in the first place but for Ben’s seat of the pants interest rate logic. It is a fact that once Bear Stearns failed, the Fed and the Treasury could and should have recognised the extreme fragility of the financial system and responded to it accordingly. Bernanke’s acknowledgement that Fed underestimated the seriousness of the financial crisis at the outset, including the danger posed by sub-prime mortgage lending, yet remaining reluctant to relinquish his role as a consumer advocate, is evident financial hypocrisy. Despite signals of falling standards (considering the fact that the sub-prime mortgage originations jumped to $600 billion in 2006 as compared to $310 billion in 2003), he was reluctant to raise interest rates to slow down credit growth. However, Ben ‘Helicopter’ Bernanke continued with his pet policy that “Fed should drop money from helicopters.” As a matter of fact, as early as October 2007, when the first cracks began to appear in the financial market, but before the economy itself began feeling the fallout, Bernanke began to aggressively slash interest rates. So much so that the collapse of US financial system in September 2008,which wounded behemoths like Lehman Brothers, Merrill Lynch, Washington Mutual, Fannie Mae, Freddie Mac, AIG, Citigroup et al, perchance was primarily Ben’s fault than anyone else. Visualise the proceedings of the next Federal Open Market Committee meeting to be held on September 22-23, 2009, wherein Bernanke dominates.


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Friday, August 03, 2012

Dr. V. Krishnamurthy, Chairman, National Manufacturing Competitiveness Council

B&E: The Indian government is on the disinvestment mode for the last one decade now. What is your perspective on the need for disinvestment?
Dr.V. Krishnamurthy (VK): Personally, I hold a different view. There are things, which the government need not do, but there are certain basic services, which cannot be left to market forces. In many respects, we are suffering by leaving it to market forces in sectors like defence production and heavy industries. How do you explain the fact that 60% of power equipments are now being imported from China? Earlier, we used to produced around 80% of the machinery. Today, it has come down to 30%.

B&E: But the government also supports cheap imports, doesn’t it?
VK: Their argument is that why should we protect Indian industries if they are not competitive. There is no level playing field. Internal reforms are taking a long time and the Indian industry is at a disadvantage. Also, the import tariff has been cut down to zero from 5%. Investment is lagging behind, which is not good and the private sector is not going to be interested. The state must intervene and cannot abdicate its responsibility.

B&E: What have been the recommendations from NMCC to strengthen the Indian PSUs?
Dr.VK: The NMCC does not distinguish between private & public sector or Indian & foreign. They want value addition in India done by any of them. As per our studies, leaving everything to market forces as in strategic sectors is not getting adequate attention. So we are saying that the government has a role. Whether in public or private, resources have to be conserved. Don’t sell raw material. Add value to it. Acquire natural assets abroad. The NMCC’s objective is to improve the competitiveness of the Indian economy. We didn’t follow the Soviet style of everything with the government. The government allowed the private enterprise to act unfettered. But the government should not feel that everything will be taken care of by the private sector. We are gradually sensitising everybody that there is a role for the government and it should be played by the government.

B&E: Do policy makers realise this imperative now?
Dr.VK: It is coming through, arising out of the current situation in US and Europe where the economy that has depended on market forces has not fared well.


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