The Indian Olympic contingent of 70 is back-with a solitary bronze medal. National humiliation, it's reasonable to say, doesn't get bigger than this. Just how can a nation of one billion be so utterly bankrupt in sporting talent? Simple. By choosing not to invest in its human resources. Consider: a third of the world's neo-literates (people who can barely sign their names) are found in India; seven out of every hundred children die at birth; the per capita food intake is 2,200 kilo calories compared to 3,624 of the US; 1.8 lakh villages do not have a primary school within a radius of 1 kilometre; and 4.5 lakh villages don't get potable drinking water on tap.

A nation preoccupied with survival cannot be expected to win the hyper-competitive global race-be it in sports or economic development.

This wasn't what the founding fathers of India had envisioned. As spelt out in the Constitution, their dream was to make elementary education available to all within 10 years of the national document being formulated. Total literacy was the foundation on which a robust and prosperous economy was to be built. Since then, the National Education Policy statements of 1968, 1986, and (revised) 1992, have reiterated the objective. The successive Five Year Plans have also repeatedly promised to take India towards the goal. And recently, the Vajpayee administration initiated an ambitious scheme, called Sarva Shiksha Abhiyan, with the objective of putting all children in school by 2003.

Yet, as the initial mid-term review of the Ninth Plan (1997-98)-still under wraps-shows, the nation's report card on education is not improving. The drop-out rate in primary schools continues to be a high of 40 per cent and in the upper primary it's higher at 54 per cent. Overall, almost half of India can't read or write. Says D. K. Srivastava, 51, Professor, NIPFP: "Education is an absolute necessity not just to catch up with other countries, but simply to move ahead."

At present, India spends just 3.8 per cent of its gross domestic product (GDP) on education, compared to 5.5 per cent in the US, and 5.4 per cent in the UK. Comparing India with the US and the UK on percentage terms is misleading because their GDP figures are vastly bigger. Translated into absolute numbers, the US spends a staggering $49 billion on a population of 276 million. Even developing countries like Malaysia (5.3 per cent) and Mexico (5.8 per cent) spend more on education.

What's the way out for India? Quite simply, to up its education spend. Budget:2000 did increase the Plan allocation for elementary education from Rs 2,931 crore to Rs 3,729 crore. But given the enormousness of the task, the hike is insignificant. For instance, the Expert Group on education, set up in 1999, reckons that an extra Rs 1,36,822 crore will be needed over the next 10 years to reach the goal.

A tall order, but not impossible. Says a senior official in the Planning Commission: ''If the government can find the money to implement the Fifth Pay Commission recommendations, which will entail an additional expenditure of about 3 per cent of the GNP, surely the education expense can also be met.'' What's lacking, however, is the political will and public pressure. Statistics show that total public expenditure on education has hardly ever topped 4 per cent of GDP.

It's a miracle, then, that an underprivileged woman should succeed when a billion others have failed.

-By Ashish Gupta

F A S T - T R A C K E R S 
They'll Get Your Job Done-So They Say

Eight days into his US jaunt, Prime Minister Atal Bihari Vajpayee announced that a 'Strategic Management Group' (SMG) would be set up in the Prime Minister's Office (PMO). The group is likely to be headed by N.K. Singh, Secretary, PMO, and will have senior officials from a range of ministries, including Power, Surface Transport, Aviation, Oil & Gas, and Coal. Its brief: facilitate implementation of big-ticket infrastructure projects by improving coordination among the various central ministries and monitoring the progress of projects.

Industry has welcomed the move, though, given the administration's track record, the optimism is peppered with caution. Says Harry Dhaul, 49, Secretary-General, Independent Power Producers Association: ''We are going through a transition phase. If the PMO is involved, things will move faster.''

But there are two problems with the SMG concept. For one, it is no different from the 'fast-track' idea mooted by South Block mandarins in 1998, to push-through eight key power projects. Fast-track fell flat on its face because of the complexities of project approval and the thorny issue of counter-guarantees. Again, the SMG will focus on projects on an individual basis rather than creating a policy environment where all projects progress with equal ease. Says Sanjay Bhatnagar, 40, CEO, Enron India: ''SMG should go a step further and generalise the initiative into a policy framework.''

Take the case of power projects. The messy issue of multiple clearances apart, what is holding the sector back is the poor financial health of State Electricity Boards (SEBs), the key customers of power plants. Unless the states ensure that the SEBs pay their bills on time, no private investor is going to risk supplying power to them.

It's the same story in other areas like roads, watersupply, or sanitation. Investments are plagued by the lack of financial closure, delays in land acquisition, and uncertainty over user-pay charges. For instance, Larsen & Toubro, which has built the Coimbatore bypass on a built-operate-and-transfer (BOT) system, has been unable to collect toll from users. Says Vinayak Chatterjee, 41, CEO, Feedback Ventures, a Delhi-based infrastructure consultancy firm: ''Promoters are not confident if they can enforce user-pay charges. Unless the government demonstrates the will to enforce them, what can the SMG do?''

Even so, industry is hoping Singh will prove them wrong.

-By Ranju Sarkar

P R O D U C T  L A U N C H
A Hot Little Thing

When Jagdish Khattar, the CEO of Maruti Udyog, drove the new Alto down a slope on a make-shift stage at New Delhi's Intercontinental Hotel late last month, one man was praying that the brakes would stand the test. Union Minister for Heavy Industries, Manohar Joshi, sitting right in the path of the car, was effusive in his praise for the car.

However, it's not the blessings of political bigwigs that Khattar is targeting. What he is praying for is consumer approval and appreciation. For, Alto-touted as the company's hottest little car-arrives at a time when the car market is choking with models and variants. To make matters worse, last year's phenomenal market growth of 60 per cent has given way to a near stagnation this year. There had been a growth of only 0.9 per cent till last August.

All that apart, Alto has its own share of convincing to do. Market-rivals point out that it looks like the Zen and the fact that the Zen is being exported to European markets under the Alto brand does nothing to enhance product differentiation. This also means that the 1061-CC Alto VX1.1, with a Delhi ex-showroom price of Rs 3,65,050, could compete with Zen LX (Rs 3.40 lakh, 996-CC). The price tag of 796-CC Alto LX, at Rs 2,99,513 is uncomfortably close to the Rs 2.59 lakh of Maruti 800 Deluxe.

A Maruti executive admits that there was a protracted debate on the pricing of Alto LX, before it was pegged below the psychological barrier of Rs 3 lakh. Dealers, on the other hand, are comfortable with the pricing of LX, but worry about VX's. ''Rs 3.50 lakh would have been better,'' says one.

Khattar is hoping that the Alto will create a segment of its own, just like the Zen did seven years ago. ''Alto LX will be at the top end of the entry level and Alto VX1.1 will be at the entry level of the Zen segment,'' says he. The two new models have cost Rs 600 crore and MUL Director (Finance) A.R. Halasyam is predicting a further fall in the already declining profits.

Either ways, Khattar had better buckle up.

-By Suveen K. Sinha

A V I A T I O N
It's A Bird, It's A Plane, No, It's Modiluft

Perseverance is not one of S.K. Modi's weaknesses. Four years after he broke up with Lufthansa, the Modiluft promoter is trying to put his airline back in the sky-for the 3rd time. What's different this time around is that Modiluft is no longer called so. Modi's aviation dreams have reborn under Royal Airlines. Also, he has managed to convince a set of professionals from SpeedWings-the airline consultancy arm of British Airways-to join Royal Airlines. And optimism is sky high. Says Rex Lazzard, 54, CEO of Royal Airlines: ''We plan to launch towards the end of January, 2001.''

Money is not a problem any more. A corpus of $41 million (Rs 188 crore) has been raised. Of that, $22.5 million has come from Allied Boston Bank, and another $18.5 million from Royal Holdings-a US-based company set up for the sole purpose of picking equity in Modiluft-which effectively will hold upto 51 per cent stake in the company. The new board comprises two members from the erstwhile Modiluft board and has Modi as the Non-Executive Chairman. But if Modi's stake in the company is partial, why does Royal need him at all? For one, foreign investment in domestic airline services is restricted to 40 per cent. Besides, Modi already has a licence to run an airline.

What about Royal Airlines' plans? It will start with five leased aircraft (Boeing 700s, 737s, and 800s) and cover 15 cities. Says Lazzard: ''I think there is a shortage of capacity in the market, which is growing at 11 per cent a year.'' By 2006, the airline intends to capture a marketshare of 18 per cent. But first, the market wants to see it take off.

-By Pooja Garg

P U B L I S H I N G
Learning To Grow

J.K. Rowling's Harry Potter And The Goblet of Fire may not have made it into too many homes in India, but there's little doubt that the toddler Rs 25-crore children's books market is fast growing up. Joining local players like Navneet Publications and Ratna Sagar are global majors such as Time-Life (a division of AOL-Time-Warner), and Penguin Books. Their target: the 7.5 million a1-a2 households comprising educated and self-employed professionals with children up to 12 years of age. Says P.M. Sukumar, 42, General Manager (Marketing and Sales), Penguin: ''Given the growth in disposable income and emphasis on at-home learning supplements, we see a huge potential in this market.''

The products offered in the segment are aimed at building visual, verbal, and cognitive skills, and facilitating reading habits. The USP of Penguin and Time-Life: high production quality. The books are sold through a combination of direct marketing-like Time-Life-or a combination of retail and direct sale, using both stores and schools as bases. Dorling Kinderseley, a recent Penguin acquisition that used direct selling, will also take to the retail route in India. Although the market is clipping at 20 per cent a year, there is a huge deterrent in its growth-the book prices. Time-Life products cost ranges from a stiff Rs 3,000 to an astounding Rs 60,000 per set. DK products are a tad more affordable at Rs 90 to Rs 6,000 with the bulk being priced between Rs 250 and Rs 500. Others have competitive pricing, but not the same quality.

To build up volumes, Time-Life has now started attractive installment schemes sold through its direct agents who seek to build long-term relationships with institutional buyers like schools and individual buyers. Penguin will be pushing the books through retail route and offer discounts. But unless the players are willing to take a long hard look at prices, big numbers will be difficult. Says Gauri Bhatia, 33, mother of two and a former Time-Life distributor: ''Everyone likes the books but baulks at the prices, even with installments.''

A lesson for the book marketers?

-By Paroma Roy Chowdhury

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