JANUARY 20, 2002
 Economy
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No Revival Yet
The CII-Ascon Survey of 110 manufacturing and 12 services sectors reconfirms what many were fearing: that an economic revival isn't around the corner yet. The culprit is the basic goods sector, which is given a 45 per cent weightage by the survey in the manufacturing sector..

Show Me The Money
It seems the Finance Minister Yashwant Sinha is going to have a tough time balancing the government's books this fiscal end. Estimates of gross tax collections for the period April-December 2001, point to a shortfall. Unless the kitty makes up in the last quarter, the fiscal situation will turn precarious.
More Net Specials
 
 
6 Those Who Made A Nation Turn Around
 

1 Monkombu Sambasivan Swaminathan
The Green Geneticist
If the dire Malthusian worldview (of population outstripping food production) did not prevail in India, it's probably due to M.S. Swaminathan. Armed with a PhD from Cambridge,he returned to India in 1954 and joined Delhi's Indian Agricultural Research Institute. With foodgrain production stagnating, the country was close to famine. Swaminathan provided the miracle that everybody had been hoping for. Taking a leaf from Mexico's Green Revolution, he cross-bred the high-yield Mexican wheat strain with an Indian variety. By 1978-89, India had a record 131 million tonne harvest. In 1987, he was awarded the World Food Prize, followed by Tyler and Honda in 1991, and the UNEP Sasakwa Award in 1994. Now Swaminathan, 76, is pushing for an 'evergreen revolution'-a way to sustain India's agricultural miracle.
(See exclusive column in this section)

2 Verghese Kurien
The Milk Man
In 2000, India emerged as the world's largest milk producer. All because 50 years ago, a young man named Verghese Kurien joined the Kaira District Co-operative Milk Producers' Union in Anand, Gujarat, as a manager. Starting with two village cooperatives and 250 litres of milk per day, Kurien went on to create India's White Revolution. His Operation Flood, launched in 1970, followed a simple structure (called the Anand Pattern): at the core were farmers and the co-operatives; on top was a district-level milk producers' union, and finally there was a state federation that did the marketing. The National Dairy Development Board, which Kurien founded in 1963 (he won the Ramon Magsaysay Award for Community Leadership in the same year), today runs a co-operative network comprising 170 milk unions and 10.7 million farmer members. The 80-year-old Kurien retired in 2000 as NDDB's chairman.

3 Faqir Chand Kohli
Father of Indian Software Industry
As an electrical engineer, F.C. Kohli was an unlikely candidate to be India's software revolutionary. But, as it turned out, J.R.D. Tata couldn't have picked a better man to lead the Tata group's foray into the then esoteric software business. When Kohli took over the reins at Tata Consultancy Services in 1969, the electrical engineer from the Massachusetts Institute of Technology only had experience in managing power plants. Worse, computer technology wasn't really a priority for the government. Kohli battled on, managing to get a modest share of the software boom that had begun in the US in the early 60s. The arrival of Rajiv Gandhi and his technology-friendly team opened up opportunities for TCS, and a horde of other software wannabes. Today, TCS is Asia's largest software and services company, and set to cross the $1-billion turnover mark (Rs 4,700 crore) in 2001-02.

4 Kiran Mazumdar Shaw
Biotech Baroness
It's rare for a woman to be the CEO of a company that leads its industry. It's rarer still for that woman to also have pioneered the industry. But then, Kiran Mazumdar Shaw is no ordinary woman. When she returned from the UK with a master's degree in brewing (her father R.I. Mazumdar was India's first brew master), she was all of 25 years old. Her original idea was to take up a job as a brewmistress. But fate willed otherwise. As it happened, she couldn't find a job. Far from being deterred, the young Mazumdar launched her own company with Biocon, an Irish firm, to manufacture enzymes for packaged fruit juices. Today, Biocon (the Irish partner sold out to Mazumdar Shaw in 1999) is India's largest biotech company with revenues of about Rs 200 crore, and focused on pharma products such as anti-infectives. It also has a subsidiary called Helix that carries out Biocon's biopharm operations. The industry estimates to generate $20 billion (Rs 94,000 crore) by the end of 2005. Don't be surprised if Mazumdar Shaw ends up with an increasingly bigger share of it.

5 Ramesh Chandra Sinha
The Super Bureaucrat
Call him India's unsung infrastructure hero. Despite 58 writ petitions against his Mumbai-Pune Expressway Project, bureaucrat Ramesh Chandra Sinha-then the Vice Chairman and Managing Director of Maharashtra State Road Development Corporation between 1997 and 2000-acquired 1,100 hectares of land and raised Rs 1,600 crore in a record 11 months. Earlier, as the Managing Director of City & Industries Development Corporation, Maharashtra (CIDCO), he spearheaded the development of Navi Mumbai, New Nashik, New Aurangabad, New Nanded, and the district headquarters of Sindhdargh. For his work, he was awarded the C.D. Deshmukh award by the President of India in 1994. Now retired, Sinha has been roped in by Andhra Pradesh Chief Minister Chandra Babu Naidu to head India's first National Academy of Construction (expected to be ready by March 2002), and also advice the state on infrastructure. To those who curse administrative red tape, Sinha is a shining example of innovative and dedicated bureaucracy.

6 P.C. Mahalanobis
India's Quality Guru
Prasanta Chandra Mahalanobis was India's answer to the American quality guru Edwards W. Deming. Just like his American peer, Mahalanobis was a statistician. And like Deming, Mahalanobis (called 'Professor' by his friends) sought to create prosperity through the use of statistics. When Mahalanobis was in his late 20s, he set up the Statistical Laboratory within the Physics department of Calcutta's Presidency College. By 1931, it became the Indian Statistical Institute, and in 1959 it was a national institution. Mahalanobis also showed India the use of sample surveys, by employing them to study Bengal's jute production and yield in 1937. Statisticians today consider that Professor's greatest contribution. But in popular memory, the Cambridge graduate is best remembered for his seminal work on the Five-Year Plan. While the decay of Nehru's command capitalism may be at the root of India's economic problems, the Mahalanobis model did give a newly independent India a springboard to prosperity. It's a pity that the expected leap did not take place.

The Making Of 'White Gold'

If there's any project that compares with the Green Revolution, it is Operation Flood. Although small dairy farmers in Kaira district had started organising co-operatives as long back as 1946, it wasn't until 1970 that Operation Flood was kicked off, and by 1974 it had help from the World Bank and European countries.

Operation Flood: how a trickle became a flood

In its first phase, the project, headed by Verghese Kurien of the National Dairy Development Board, linked India's 18 best milksheds with markets in Calcutta, Chennai, Delhi, and Mumbai. In the second phase beginning 1981, the NDDB expanded the milkshed horizon to 136 and markets to 290 urban centres. By the end of 1985, some 43,000 village co-operatives, comprising 4.25 million milk producers, were part of the network. Milk production had jumped to 41.5 million tonnes from 23 million tonnes in 1974.

The third phase focused on helping co-operatives build infrastructure to collect and process more milk. Just like Green Revolution, Operation Flood used cross-breeding to produce higher yielding milch animals.

Today, India is the biggest milk producer in the world (it wrested that title from the US in 2000). According to Indiadairy.com, the industry racked up Rs 1,05,000 crore from milk, cheese, butter, and other dairy products. There are an estimated 96 million milch animals producing 203 million litres of milk per day. The World Bank estimates that Operation Flood resulted in dairy farmers making $9 billion more per year than they would have if milk production had continued at the 0.7 per cent growth rate prior to the launch of Operation Flood.

In 1995-96, the third phase of Operation Flood came to an end. A World Bank impact study shows that the Rs 200 crore invested by the bank in second phase of Operation Flood returned Rs 24,000 crore per year until 1995-96. That's a total of Rs 240,000 crore in just 10 years. By then, 93.14 lakh members were part of the cooperative movement.

NDDB's Perspective 2010 is focused on four areas: strengthening co-operatives; enhancing production; assuring quality, and creating a 'National Information Network'. NDDB plans to increase liquid milk-procurement levels to 488 lakh kg per day, and liquid milk sale to 365 lakh kg per day. In other words, between 1995 and 2010, India will produce 1,457.6 million tonnes of milk, double that of the past 15 years' total production. And to think that the Amul story was kicked off with two villages and 250 litres of milk a day.

Software: India's Paradigm Shift

An 80s engineer works on a programme

Software has to be India's revolution for the decade. If the White and Green Revolutions were because of governmental support (in some fashion, at least), the one in infotech happened purely because of free enterprise... because a bunch of techno-entrepreneurs could freely scour the world markets for business. And with no finished physical product to show, could escape the arcane Excise and Customs laws that stunted India's hardware industry.

In the US, businesses started using computers beginning the 1950s. A few contract programming firms popped up during that time, and in the decade that followed, more such firms (now known as 'professional services' firms) jumped onto the bandwagon. The 70s saw users accept software as products and pay to use them. The advent of personal computers (PCs) pushed up the demand for software. The International Computer Programs (ICP)-a software buyer's guide-set up the first Million Dollar Awards programme in 1971 to recognise software that fetched $1 million (Rs 47 crore) or more in revenues. In that year there were 29 such software products. By 1976 that number had grown to 100.

In India, the first company to look at software as an opportunity was Tata Consultancy Services, which was launched in 1968. A year later, Mafatlal Consultancy Services came into being, later followed by DCM Data Products, Hinditron Computers, Patni Computers, Datamatics, PSI Data, and org Systems. Infosys didn't arrive on the scene until 1981. Until then, software was a cottage industry with just Rs 4 crore in turnover.

The turning point for the industry came in 1995, when enterprise resource planning (ERP), and the client-server technology became popular. Suddenly, there was a pc on every corporate desk in the US, and the demand to design and implement ERP systems snowballed. Between 1972 and 1995, the spending on it in the US grew at a staid 9 per cent. But between 1995 and 2000, it almost doubled to 16 per cent.

Back in India in the early 80s, the then Prime Minister Rajiv Gandhi was clearing the decks for it. He launched technology missions, and set focus on telecom. Thanks to improved telecom and easier import of computers, Indian companies increased their share of business. A shortage of skilled manpower in the US led to Indian companies bagging more onsite projects, and the Y2K bug fear fuelled the demand to an unprecedent level.

By the mid-90s, another phenomenon was sweeping across the US. This was the dotcom boom. Companies scrambled to ensure their survival by building capabilities that would allow them to interact with customers online. Internet allowed them to create a bigger network of suppliers and dealers. The National Association of Software and Service Companies (Nasscom) estimates that in 2000, the world market for software services was $400 billion. The market for software products was another $400 billion.

The turnover of Indian software industry soared from Rs 1,535 crore in 1994-95 to Rs 28,350 crore in 2000-01. IDC estimates that by 2005, the global it services market will be $700-billion big, and Nasscom is projecting industry revenues of $87 billion (Rs 4,08,900 crore) by 2008. The drivers will likely be services such as application outsourcing, and network consulting and integration. Software, simply, is India's best big hope.

 

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