TRENDS (Page 2)

SILICON DREAMS
Hardware In India: What May Be

The old refrain about India being everything in software and nothing in hardware could change. The operative word, of course, is could.

India may become a hardware superpower by the time this chip learns to walk

Digest this: for every 100 rupees worth of software India exports, it does 4 rupees of hardware. It isn't that global hardware majors haven't considered India as a manufacturing base, but as the chief executive of one said recently to BT, the minute the government starts saying: ''Of course we'll do it for you,'' they start having doubts. ''If it is going to be a special thing for me, then will I be victimised later by another government?'', the man explained, is the reasoning behind such thinking.

Who Duped The Financial Institutions?

Cricket, Anyone?

Sure enough, several newspapers recently reported that the it Minister had promised Intel that it could be assured of an uninterrupted and regulated supply of power if it did set up a chip plant (Mega Fab, for the jargonists) in the country. Intel refused to either deny or confirm that it was considering putting down manufacturing roots in India, but a Central government report on the state of the hardware sector in India mentions that Intel could invest up to $500 million in a manufacturing facility in India.

There's no reason that shouldn't happen provided, as Vinay Deshpande, the President of the Manufacturers Association of Information Technology, says the GoI, ''removes the many infrastructural bottlenecks (that frighten away potential investors)''. Even in the absence of such efforts, some companies are going ahead with investments in hardware. Acer, IBM, and HCL are increasing the manufacturing capacities in India's hardware capital Pondicherry, and Samsung is investing in a pc monitor plant in NOIDA. ''By 2004, this will have a capacity of 4 million units a year,'' says Samsung Electronics India Information and Telecommunication chief S.S. Lee. ''India will become an export hub (for us) catering to markets in this part of the world.''

Maybe, that'll redress the 100:4 skew some.

-Venkatesha Babu

MALFEASANCE
Who Duped The Financial Institutions?
Rich industrialists and their poor companies, that's who.

Vinay Rai: The CBI and the tax department allege he and his brother Anil duped the FIs

Of course the financial institutions are to blame for the accumulated losses of Rs 18,000 crores on their books. Their appraisal of projects was downright bad-they merely looked at whether the project was viable in a protected market characterised by high tariff walls-and their supervision of loan portfolios was, at best, inadequate. But equally to blame are companies (some promoted by top Indian business houses) that systematically gulled the financial institutions.

In the 10 years between 1985 and 1995, it was a rare Indian company that didn't start off on an ambitious greenfield or expansion project. And it was a rarer company that managed to get its project-financing right. These chickens are coming home to roost now, and the FIs are feeling the pinch.

The list of businessmen involved in this milk-the-FIs drive is a veritable who's-who of corporate India. There's Shashi and Ravi Ruia, whose Essar Group owes IFCI Rs 1,573.90 crore. The Ispat Group owes IFCI Rs 1,237.60 crore, and the Jindal Group owes Rs 884.20 crore to the same FI. With access to more funds, some companies in this long list, a Mumbai-based equity analyst believes, could turn profitable. And most companies involved have not resorted to the route-shell companies and fake transactions-taxmen and CBI-investigators claim the Rai brothers did in their effort to siphon money out of Malavika Steel, Usha Ispat, Information Technology India, Koshika Telecom, and Usha India (together the five owe FIs a whopping Rs 1,240.60 crore). Why would they need to? There is, as The Modus Operandi shows, a simpler way to gull the FIs.

-Ashish Gupta

TRAINING
Cricket, Anyone
Trainer-tricks to sort out organisational teams as inconsistent as this one.

Down, Up, Down Again...

It wouldn't do to have a sales team exceed its target by a wide margin one quarter, only to fall below it by as wide a margin, the next. Yet, that's what the Indian cricket team-which had won the second test match against Sri Lanka at the time this magazine went to press-does. Companies have ways to deal with teams that miss targets (and that doesn't include medieval torture implements). ''If my sales team were as inconsistent as the Indian cricket team,'' details Manjit Singh, DGM (sales) at Hero Honda, ''I would put them through gruelling training to enhance their communication and negotiation skills. Adds the National Institute of Sales' Vijay Kohli: ''We work on correcting the attitude of the sales team through one-to-one sessions.'' Applying tenets that work with one field activity to another may seem a bit of a stretch, but given the Indian team's performance anything-that includes voodoo-goes.

-T.R. Vivek

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