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O V E R N M E N T
If There's Anything That You Want
The Government of India sets up an on-line agony aunt.
Have crib, will write, should now be read as have crib, will e-mail. In an inspired attempt at e-governance, the Directorate of Public Grievances
(DPG)--the Government of India's grievances redressal department--has created a Website
(www.dpg. bharatsarkar.nic.in), where those disgusted with the functioning of the 14 ministries and departments can register their complaints, and actually hope to see them addressed.
Once an individual registers the complaint, she will be provided with a
registration-number. Claims Arun Shourie, 58, Union Minister of State: "Complaint-redressal becomes a location-redundant and accountable process." Plaintiffs can log on at any time, key in the registration-numbers they have been issued, and view the status of their complaints. And if they feel that there has been an inordinate delay in the process, they can e-mail reminders to designated officers in each department, or to a co-ordinator, and hope to see some action. Fast.
The benefits: the lead-time of 2 weeks that was involved in the DPG forwarding grievances to the ministries concerned (through snail-mail) has been reduced to just a few hours by connecting the grievances-site to each of the concerned ministries and departments. And the DPG can maintain a database of grievances, and generate from this reports on the efficiency of the departments in terms of dealing with grievances. Evidently, the government, or some parts of it at least, has just got itself a Net Nanny.
-Sahad
P.V.
L
A U N C H E S
Pop Goes The Brand!
Yet another attempt to brand the poppadum gets under way.
Will it be second-time lucky for the poppadum, or the papad? Providence is what the Rajkot-based Patira Foods is counting on to make its Tastee brand of the snack a success. The first company to launch branded papads on a national scale was Mahila Griha Udyog, a co-operative that leveraged its unique business model to build its Lijjat brand. And the first corporate entity to try to launch a national brand of papad was the Chennai-based MAC Industries. But its Macos brand could not make any impact in a price-sensitive market dominated by the unorganised sector. What, does Patira hope to do differently?
Nothing much. Says Anik Banerjea, 42, General Manager Marketing, Patira Foods: "We are adding value in terms of packaging and marketing." Maybe, but the 2,000 recipes Patira claims to possess, or the 12 flavours that its offerings come in are unlikely to cut any ice with the customer. What could work, though, are Patira's global plans. Another company from the same group, Patira International, has invested in a state-of-the art manufacturing-facility in London, which will cater to the export market for papads and rice crispies.
In India, though, its contrarian strategy of targeting pubs and up-market restaurants, and its channel-strategy of distributing its product through 15 super-distributors, who will appoint regional and local distributors, may not work. The reason: local brands enjoy price- and cost-advantages that Patira will not be able to match. And the costs of promoting the brand could prove its undoing. This could be a case where a company would have been better-off thinking global and acting global too.
-Rakhi Mazumdar
e
- N T R E P R E N E U R S H I P
Where Fools Fear To Tread...Angels
Tend to Venture In
Venture capital companies bankroll the dot.com gold-rush. Are you chasing it yet?
Fairy godmothers Ver. 21C go under the garb of venture capitalists. The proponents of the Your-Idea-Our-Money culture have spurred the move to go (not West), but www, and are responsible for the majority of the 175 Indian dot.coms that have sprung up since March, 1999.
A back-of-the-napkin exercise carried out by BT indicates that, over the next 2 years, 9 venture-cap firms--there are 19 that operate today--could pump in Rs 6,800 crore of risk capital. The actual number of companies, and the quantum of funds is likely to be much higher: dot.com coffers, like Arthur Andersen's global $500-million fund, are yet to go public with their plans for .ins (that's Indian dot.coms for the uninitiated).
Not surprisingly, NASSCOM estimates that investments in hi-tech companies touched Rs 1,400 crore in 1998-99--a 130 per cent increase over the Rs 610 crore that was invested in this genre in 1998. And NASSCOM also predicts that the cumulative value of venture cap funds invested in the country could reach the $10-billion mark (Rs 45,000 crore) by 2008.
This isn't without basis. The fact that the dot.com revolution is still in its infancy in this country means that venture capitalists can buy into the Indian equivalents of Yahoo! and Amazon. And, as even the greenest of venture capitalists can tell you, getting in on the ground-floor is easier. Also driving the rush of venture capital is the large number of knowledge-workers in the country. Most of them hold regular jobs, but every one of them aspires to be a dot.com entrepreneur.
Avers Som Shankar Das, 42, General Partner, Walden International Investment Group (WIIG): "There are many potential entrepreneurs in India. They have the knowledge and the expertise to make it big. All they need is some capital, and some hand-holding." But no vecee investment is motivated by altruism; returns are what matter.
In that context, Indian dot.coms fare well: the ICICI Venture Fund--which was established in 1983, and has, so far, exited from 80 companies--boasts returns of 35 per cent, and 55 per cent from investments in infotech companies. Explains A.J.V. Jayachander, 38, President, ICICI Venture: "The returns are comparable to those in the US. This will attract larger venture capital investments."
Several regulatory initiatives will aid this process: IPO rules are to be modified to allow venture capital-funded companies to go public without the mandatory 3-year profitability record. And, for the purposes of taxation, venture capital companies will be treated in the same manner as asset management companies. A venture-cap firm is, at present, taxed twice. Once at the fund level, when it makes profits, and again, when the investors are paid back their money with the profits. Mutual funds, on the other hand, are taxed only once, when the AMC makes a profit.
But this rush is not without a flip side: several dot.coms will come up just to tap the vast amount of money that is floating around. If too many venture capitalists end up chasing too few good dot.coms, several of them could end up with pumpkins on their hands. And stop venturing out.
-Dilip Maitra
R
E G U L A T O R S
On the Wings Of Hope
Yet another regulator, this one for civil aviation, may be in the offing.
Alate take-off. Last month, the Ministry of Civil Aviation circulated a document which may, finally, ground the vintage Airline Policy--framed in 1934--of the Government of India. And, if the draft document manages to become a Bill, and then, an Act, the Directorate-General of Civil Aviation will simply cease to exist. In its place will stand the Civil Aviation Authority (CAA), a statutory and autonomous body.
The government's intention is to entrust the key issues related to aviation--safety, security, and the regulation of air-transport--to the new body. The regulator will act as a watchdog and a facilitator, check for any deviations from the ordinary, settle disputes, and, above all, ensure a level playing field for all the agencies involved in the sector.
Observes a Confederation of Indian Industry (CII) paper on the draft proposal: "The regulatory authority should be properly empowered, and given a clear transparent set of working-rules. This would address the risk that the private investors feel associated with." CII also recommends that the regulator be given the mandate to fix airport tariffs, which is critical to attract investments in airport infrastructure.
Companies investing in this area would wish to know what the likely returns are, and the airport-tariff is an important component of this process. But the draft is silent in this aspect. Rues M. Roy, 55, Deputy Director-General, CII: "The CAA should be given the authority to determine the airport-charges in an objective, formula-driven manner. The government has lost an opportunity to improve the quality of airport infrastructure in the country." In effect, the draft policy addresses issues related to competition policy, but does not look at those related to privatising infrastructure.
The CAA is modelled along the lines of the UK's Civil Aviation Authority and the US' Federal Aviation Authority. But its ability to play the role of an impartial regulator will, eventually, depend on the government's privatisation drive. For, if the GOI wishes to hold on to its majority stake in Air India, Indian Airlines, and the airport infrastructure itself, the desire to protect its revenue-streams may force it to influence the CAA.
This, in turn, will mean that the CAA, like the TRAI, may find itself fighting one court-battle after another, seeking to define its role and the scope of its authority. Coming in the wake of an announcement by the GOI that it was seeking to dilute its stake in the national carriers, the Draft Aviation Policy may be just what is required to clear the skies. But, if this privatisation drive falls through, the draft may end up as something that means well, but does not have the teeth to achieve anything. Like a paper rocket.
-Sahad
P.V.
M
E D I A P L A N N I N G
Watered Down Effects
Does advertising matter in this within-arms-reach-of-need market?
Water, water, everywhere. The 100 brands of mineral water available in India may be a fallout of the poor quality of potable water here. But the category isn't an advertising-intensive one; reach is what matters. Between November 8, 1999, and February 6, 2000, only 941 spots for the category were aired. Parle's Bisleri accounted for 50 per cent. The fact that the brand with the second-highest number of spots (275), T-Series' Ganga, achieved an overall GRP-delivery of 17 can be attributed to poor media-planning. With customers referring to every other brand of mineral water by the generic name, Bisleri, Parle could find that other forms of promotion generate more bang for its buck than advertising. Flooding doesn't help water-sales.
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