|
|
            
|
L E A D E R Free Economy, Huh? Some rich but harried consumers of utilities in Delhi don't depend on public agencies; they own their utilities.
Necessity is the mother of inventions. Ergo, the residents of the nearly 40-year-old (but illegal) colony meant for retired defence personnel have set up 13 associations that take care of utilities. For instance, the colony has nearly 25 kilometres of private road, which is maintained by the associations. Every two years, the roads are relaid using the best of technology (it's obvious the moment you enter the colony) and the cost is shared among the members. The roads have their own revenue-generation model, too: all commercial vehicles entering the colony have to pay a road fee, which is Rs 5 in the case of an autorickshaw and Rs 25 for medium and light commercial vehicles. If that isn't impressive enough, take a look at this. Until a few years ago, most residents (at least those who weren't tapping into power lines from nearby areas) had individual generator sets. But since then, residents have formed groups of about 40-50 and installed community generators. And underground cables and sophisticated distribution boxes to boot. Users are even sent computerised bills every month. Although the residents wouldn't give details, BT spoke to generator manufacturers like Cummins Power Solutions and Kirloskar Oil Engines to piece together the economics of community power generation. A 125-kva diesel generator set costs up to Rs 4 lakh, with another Rs 50,000-75,000 being spent on erection and installation. Assuming that four dg sets are needed for a user base of 40, the cost per household works out to Rs 48,000. The cost of power is determined by, one, price of diesel and, two, usage. Typically, every litre of diesel generates 3.7 units of electricity, translating into a fuel cost of Rs 4.30 per unit. With maintenance and personnel costs, it costs residents nearly Rs 5-6 per unit of electricity, depending on the usage. Says Meher Singh, one of the original residents, who is involved in community power generation: ''It works out more expensive, but is dependable.'' Is that what they mean by free economy? -Ranju Sarkar E M P L O Y
M E N T Last year was a good time to be an employee of India Inc. According to Hewitt Associates, a consulting firm, base salaries rose between 12.4 per cent and 15.1 per cent, making corporate India the most generous of the 10 other Asia-Pacific countries surveyed. The survey covered 86 foreign, locally-owned and joint venture companies, and cut across five employee groups: senior and top management, managers, professional/ supervisor/technical, clerical and support, and manual (hourly). The catch? ''It is true that salary increases for managers and professionals have been aggressive, whereas the quantum of growth for clerical/support and manual workers has been poor and even negative,'' says Sanjay Lakhotia, Head of Management, Hewitt Associates. But that could just be a sign of things to come. According to another study done by W.I. Carr Securities, changing employment patterns could have serious implications for marketers. Most of the big manufacturing companies, the survey reveals, have either put a freeze on employment or have reduced headcount. Sustaining the momentum is the services sector, which already accounts for nearly a quarter of the employment. In fact, between 1991 and 1999, salaries of those employed in the services sector rose 15 per cent faster than in other sectors. ''In contrast, there's been a marked slow down in the manufacturing sector,'' points out Narender Nagpal, Country Head, W.I. Carr. Adds Preety Kumar, Managing Director, Amrop International: ''The hikes in the manufacturing sector have not been as fantastic as those in the new economy segments like infotech, telecom, and entertainment.'' According to the National Council for Applied Economic Research (NCAER), nearly 19 per cent of the major household earners in India are salaried. Nearly a third are wage earners, and petty shopkeepers, while artisans make up another 12 per cent. W.I. Carr says that the changing employment pattern has created job insecurity for the urban working class, and that could adversely affect consumption. Not a great piece of news to begin the year with. -Shamni Pande T R A D E Picture this. It's the middle of the day and your factory workers are working against the clock to meet export orders. There's a knock on the door and a motley bunch of people from an NGO walk in and demand a closed-door session with some of your workers. Don't close the door on them. It just might be the end of your export orders. Just how? Well, the workers from the NGO are there to carry out an SA 8000 audit. This is not about manufacturing processes, instead it deals with improving labour conditions in the factory. Social Accountability 8000 was set up by New York-based Social Accountability International in 1997. Western governments and media are increasing the pressure on their companies to ensure that their suppliers in third world countries meet ILO norms, on which the SA 8000 is based. To become certified, you'll need to open your books to independent auditors (usually NGOs) who'll do a periodic inspection and verify whether you are actually a good employer. To do that, they'll ask some rather exasperating questions both to you and your workers separately. Here's a sample: are the workers in your factory present voluntarily? Does the factory have a written policy against the use of prison labour? Is there any reduction in wages for manufacturing defects? Are workers allowed to go to the toilet? If so, how many times in a day? Apparently, Social Accountability International assumes that every factory in the third world is a sweatshop in disguise, which explains why of the 57 factories in the world that have an SA 8000 certificate, 39 are in China. ''Over the last two months, many garment exporters in India have got these questionnaires from their buyers,'' says a Delhi-based garment exporter, who's been at the receiving end. Most exporters see a larger conspiracy. Says Vijay Mathur, Director, Apparel Export Promotion Council: ''This is a non-tariff barrier and the government should find a way to tackle this.'' Maybe it should take a leaf out of China's book. Which has finally made such foreign NGOs unwelcome by saying, thanks, but we don't need your help. We have our own set of labour laws, which we enforce effectively. -Bharat Ahluwalia E N G I
N E E R I N G It's an unlikely winner in an industry that's on drips. But machine tools may not count its blessings for too long. Having bucked the trend in the ailing capital goods industry with an estimated 15 per cent growth this fiscal, machine tool manufacturers are staring at the possibility of weak domestic demand ending its smooth run. Says S.G. Shirgurkar, President, Indian Machine Tools Manufacturers' Association (IMTMA): ''The demand is not growing, and what's more worrying is that new investment in user industries is almost negligible.'' Part of the segment's growth has come from a steep fall in import of machine tools, and part from a nearly 20 per cent cut in domestic prices. There's also a shift towards hi-tech machines. For example, the share of computerised and numerically controlled machines (CNC) has gone up from 35 per cent to 50 per cent in the recent years. Says Bir D. Singh, Executive Director (Engineering Business), Voltas: ''Indian products are gradually gaining acceptance in the international market, but the process is very slow.'' A long grind ahead? -Jaya Basu B A N K I N G
Part of the problem is that banks, thanks to a Supreme Court ruling, can't pick and choose who gets the VRS option. To minimise the damage, however, they have tried to keep the specialised cadre-software and treasury personnel-out of the VRS cover. But it has not really worked in many cases. Argues, K. Shankar Shetty, General Manager, Vijaya Bank: ''It's only natural that people who are technically qualified and more sure of getting a job in the private sector be the first to leave.'' Some banks, of course, are putting up a brave front. Says R.J. Kamath, Chairman and Managing Director, Canara Bank: ''Even if the 5,000-odd officers and clerks who have already applied for VRS leave, it will not spell doom for our bank since we have a large pool of talented manpower.'' Besides the run on talent, there will be a huge outflow of cash from bank coffers. An estimated 8.8 lakh people work for nationalised banks and retiring just a quarter of the workforce would cost a staggering Rs 13,000 crore (approximately Rs 6 lakh per clerk and Rs 9 lakh for every officer). According to the IBA guidelines, banks can pay the retirement money either at one go or provide 50 per cent in cash, and the rest by way of bonds or deposits. The first big impact of such an outflow would be on the Capital Adequacy Ratio (CAR) of the banks. Lobbying is already on to for a relaxation in the 9 per cent car limit banks are supposed to meet. Borrowings won't help either. Explains Kamath: ''The cost will be deducted from the Tier 1 capital of the bank, which consists of equity and reserves, minus the intangibles. The auditors will consider the outgo towards VRS and other dues as intangibles and not allow the banks to restructure their Tier 1 capital.'' Small wonder, then, that banks are beginning to think VRS wasn't such a good idea after all. -Ashish Gupta
|
|
Issue Contents Write to us Subscriptions Syndication INDIA TODAY | INDIA TODAY PLUS | COMPUTERS TODAY © Living Media India Ltd |
 |
 |
It could
be a model of private ownership of public utilities, except for one minor
glitch: it's illegal. Ignore that and Delhi's swank Sainik Farms is where
you'd want to be. There are no power outages, no potholed roads, no
rotting garbage round the street corner, or noisy residences-turned-shops.
And if you are wondering why, the reason is simple: none of the
well-heeled residents in this colony depends on the local government for
(civic) utilities. Instead, they've come together to hire out these
services from private companies. Not purely out of choice, though. Except
for the Mahanagar Telephone Nigam Ltd (MTNL), none of the other
state-owned municipal service providers recognises Sainik Farms. In other
words, it doesn't exist as far as they are concerned.
The Voluntary Retirement Scheme (VRS)
announced in September, 2000, to trim the ranks of public- sector banks
threatens to turn into a nightmare. Just how bad? ''If we accept all the
applications we've received, it will be difficult to run our branches,''
says the managing director of a large nationalised bank. Apparently, it
isn't just chaff that's getting separated, but wheat too.