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L E A D S T O R Y Real Reforms, Please
It never rains, but pours on Raisina Hill. Just when you thought that reforms was a word gone missing in the Vajpayee administration's dictionary, it has unleashed a slew of policy initiatives. Beginning July 1, 2000, steps have been taken to cut government expenditure, privatise long-distance telephony, and sow the seeds of a new national agriculture policy. Surprise, there's more in the works, including the rumoured phase-out of fertiliser subsidies and sops for the small scale sector. Is this Reforms Part Two or are the policy makers merely trying to get into the good books of US investors, ahead of prime minister Atal Bihari Vajpayee's visit to the White House in September? Opines S.L. Rao, 64, Central Electricity Commission: ''It's a lot of talk, very little action.'' Rao has a point. Pull the veneer of hype away and one finds no new initiatives, with the exception of the national agriculture policy. Much of the measures announced had been due since December last year. Domestic long distance telephony was slated for deregulation in January, not July; the cut in interest rate on employees provident fund had been on the cards since February, when the rates on small savings were slashed. Similarly, the permission for satellite uplinking had been hanging fire for nearly six months. Even the brand new agriculture policy, despite its forward-looking approach, skirts issues like ending minimum support prices and taxing farmers. Besides, agriculture is a state subject and most of the policy recommendations relate to things over which the GOI has no control. So, the policy is really nothing more than a statement of intent. But persistence isn't one of this administration's flaws. Consider the way the GOI scored a point by rejecting Union Petroleum Minister Ram Naik's demand for strategic status to the oil sector. But before private investors could rejoice at the thought of owning a piece of state-run oil companies, the government came out with the caveat that disinvestment would be considered on a case-to-case basis. Explains Amit Mitra, 52, Secretary General, Federation of Indian Chambers of Commerce and Industry: ''It's part of a strategy: push through non-controversial issues and keep hammering at the contentious ones.'' To be fair to Vajpayee and Co., though, there is an element of earnestness this time around. Yashwant Sinha has unlearnt his ''Come September'' refrain that saw him pay lip service to reforms but not deliver. Still, if sweeping reforms aren't happening, there are reasons. Points out D.H. Pai Panandikar, 67, President, RPG Foundation: ''Given the coalition structure, it isn't easy for the prime minister to push through all reforms.'' Vajpayee, Panandikar insists, is at least convinced of the need for reforms and knows that this is his last chance. Perhaps, Panandikar is right. But mere realisation will prove a poor antidote to the economy's ailments. Sure, corporate India has just finished toasting to robust first quarter results. But if the economy misses its 7 per cent growth target, and a weakening rupee pushes up interest rates and stalls private investments, Vajpayee will be hardpressed to defend his report card. At the moment, however, India Inc. is willing to give Vajpayee a five on action, but a full 10 on intent. By Seetha BUREAUCRACY
If the Union Cabinet were to accept a proposal already cleared by the Finance Ministry, India could soon have a new-look Income Tax Department. Lean, top heavy, and very computer-savvy. In fact, a major cadre-restructuring exercise has already been carried out in absolute secrecy. The plan could raise the heckles of middle and junior staffers since it talks of a 12 per cent cut in employee numbers across ranks. People in the know say that even senior officers could get the boot. There's talk of reducing the number of chief commissioners from 100 to 75; of commissioners from 350 to 275, and that of joint commissioners from 780 to 550. The number of commissioner posts was calculated on the basis of the Wanchu Committee report of 1989, which suggested the creation of one new commissioner post for every 60,000 additional returns filed. According to the Central Board of Direct Taxes, 21.3 lakh new assessees were added last fiscal. Therefore, by that logic, 35 additional posts should have been added, argues an it official. The cadre-restructuring proposal has borrowed heavily from the Canadian International Development Assistance (CIDA) project, which talks about an inverted pyramid-structure. What it means simply is sacrificing higher number of junior-level posts and having an officer-oriented organisation. Secondly, it would be a tech-savvy organisation. The plan proposes to use computers in a major way, given the fact that the pan number has become a common identifier. For assessments, a unit-model is believed to have been proposed. The concept of an assessing officer will be done away with. Instead, assessment responsibilities would be earmarked unit-wise. The idea: achieve uniformity in assessments. No time-frame has been set for the overhaul. But the odds of the Union Cabinet approving the radical re-design seem far too long. By Ashish Gupta HOSPITALITY Is the Indian hospitality industry heading for a glut? According to Pannell Kerr Forster's City Survey 2000, international business at hotels in India does not show any significant gains. And cities like Bangalore, which did report impressive occupancy gains, had the domestic traveller to thank for it. Chennai is one city that managed to attract more of international guests. Hotels in other cities have, however, been forced to slash their room rents. Says Uttam Dave, 35, CEO, PKF Consultants: ''The trend seems to suggest that Indian hotels would do well to focus on growing the domestic market.'' There may be no choice, given the frenetic pace at which rooms are being added. In Mumbai, another 3,256 rooms are slated to come up by 2003. Putting these up are 10 players, including Radisson, Le Meridien, Intercontinental, and Hyatt Regency. In Delhi, 891 rooms are being added; in Chennai, the Magunta Oberoi will add 350 rooms and in Bangalore, between Krishna Continental and Leela Palace, 423 more rooms will be available next year. The glut could prove fatal in view of the dwindling occupancy rates. In Mumbai, that figure is down from 65.9 per cent in 1999 to 63.8 per cent this year; and Delhi has taken bigger hit. Bangalore bucked the trend, making a 14.5 per cent gain in occupancy. The hotels have had to cut room rates to lure customers. Average room tariffs were down by 21 per cent in Delhi and 12.6 per cent in Mumbai. Even Bangalore was forced to bring down rates by 9.1 per cent. In fact, economy hotels could well be the way ahead for the industry. ''Hotels have to think in terms of international hygiene and comfort standards at stripped down rates,'' says S.P. Shrivastava, 60, Managing Director, Radisson Hotel, Delhi. The Carlson Group-which owns the Radisson, Country Inn, and Regent brands-has decided to concentrate on the three- and four-star ranges and expand its former two ranges. Even the upscale Bass Hotels & Resorts group, which owns the Intercontinental and Holiday Inn brands, is furiously setting up its Holiday Inn brand at mid-level in all upcoming locations in India. Profits may be lower in the mass market segment, but it will definitely help the industry even out its demand cycles. By Shamni Pande EDUCATION As any parent who has undertaken the Herculean task of getting her kid admitted to a school would know, education is a serious business. And now, a few schools are taking it to the realm of the dead serious. Taking a leaf out of corporate India's books, they are adopting savvy management credos to achieve 'total quality education'. The TQE's scope: students, teachers, and even parents. And the schools in question: Mirambika, Sanskriti, Shriram, and Vasant Valley in Delhi; Cathedral & John Connon School and Bombay International in Mumbai; and Sishya in Chennai. Says Arun Kapur, 46, Director, Vasant Valley School: ''Schools must adapt to changing circumstances so that they can cater to the community's changing needs.'' Ergo, Vasant Valley is promoting 'inclusive education' that even involves the school's gardeners and cleaners. It has two senior professionals engaged full-time in teacher development. The school is also setting up a centre for teachers in collaboration with the Delhi University, and plans an e-ducation portal. The Shriram School does psychographic profiling of would-be teachers before employing them. The idea: ensure a total cultural fit with the school's policy of child-friendly and creative learning. It also hosts rolling-in service programmes, teacher development workshops, a formal goal-setting exercise, and structured performance appraisals. Underlines Abha Sood Adams, 47, Principal, Shriram School: ''We focus on building the child's potential and do not seek academic excellence alone. Teachers and parents are expected to share these values.'' Yet others, like the fledgling Sanskriti School in Delhi, are adopting best practices culled from institutes around the country, while Mirambika groups children according to ability rather than class and customises learning accordingly. And at Chennai's Sishya, run by the K.T. Thomas Trust, teaching includes experiential learning techniques. Do the new techniques help? Says Swaha Shome, 36, a lecturer in economics and a mother, who has seen her 10-year-old son through both old and new-age schools: ''It is true that the children enjoy themselves at these experimental schools. But in the long run, conventional schools could turn out to be a pragmatic choice.'' The three R's or cutting-edge? Take your pick. By Paroma Roy Chowdhury CEO SURVEY Until five years ago, strategy was what sat in the boardroom and not the systems room. But more and more CEOs worldwide are using infotech to serve their customers better and penetrate new markets. Or so says an A.T. Kearney report on 'Strategic Information Technology and the CEO Agenda'. The survey of 251 CEOs and senior executives in 26 countries, says the Net's rise has blurred the distinction between business and technology issues. And even as the CEOs seemed overwhelmed by the speed of change, they were moving quicker. The CEOs also seemed less able to correlate their current concerns with critical success factors (CSFs). When asked to name their top two concerns, the CEOs cited growth and re-engineering. And the preferred CSFs were 'customer service' and 'quality staff'. While they named 'competitive pressure' and 'technology' as their two key challenges, they pointed to 'customer needs' and 'flexibility' as the primary CSFs. In fact, since the firm's first such survey in 1996, there have been significant changes in the perception of CSFs. For instance, hiring and retaining skilled personnel has risen from being No. 5 priority in 1996 to No. 1 in 2000. Cost efficiency, which used to be No. 1 CSF in 1996, now ranks No. 6. Proposes the report: ''The items dropped off the list are those with relatively long lead times for benefits. This may be a reflection of the increasing pressure CEOs are feeling to deliver results.'' But, then, nobody said that surfing the e-wave would be easy. By Seema Shukla |
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