The year, by stockmarket-metrics, hasn't begun well for India's software biggies. What they gained in the first week, they more than lost in the second. The market, though, is mercurial in its shifts, and there are indications that 2002 could see the renaissance of the sector many consider India's most vibrant, software. The first is industry gold standard Infosys' results: despite 9-11, the company registered a growth of 24 per cent in net profit and 19.7 per cent in sales for the quarter ended December 31, 2001 (over the same period the previous year). And while neither grew very much in comparison to the previous quarter, the very fact that they didn't fall in a quarter that was widely anticipated to be the worst for Indian software services firms is being held up by some analysts as sign enough of a recovery.

	2001's Big Bugs
	Whither Rupee Zone?
	Them Mean Old Reconstruction Blues
	OBITUARIES

The second is the fact that billing rates that headed south in previous quarters, stabilised, and according to the National Association of Software and Service Companies (Nasscom), even rose by between 2 and 3 per cent for some first-tier companies.

The third is the changing profile of it-spend in the US where companies are seeking to maximise the return on their existing infrastructure. That translates into more work being outsourced to India. And fourth, the slowdown has prompted Indian companies to aggressively market their services to governments and utilities abroad, a process that is just starting to bear fruit. ''We are begining to see light at the end of the tunnel,'' says Kiran Karnik, President, Nasscom. ''But it is still early days.''

The numbers do indicate a better year ahead. The world market for it services, valued at $390 billion at the turn of the century, is estimated to grow by 9 per cent through 2005. India's penetration, analysts point out, is a mere 7 per cent of an addressable market of $90 billion. A recent report by Forrester Research says India is a preferred outsourcing destination and that the quantum of work being outsourced by American companies to India will increase from 12 per cent in 2001, to 28 per cent in 2003. Then, there is the great it-enabled services hope, which will, in contrast to software's 30-35 per cent, grow by 60-70 per cent in 2001-02.

So, is the worst of the tech-freeze over? ''I definitely see the slowdown flattening out,'' says Arjun Malhotra, the CEO of TechSpan. ''Things will start looking up after March.'' May be, but while the US economy shows signs of staging a recovery, the French and German ones are displaying symptoms of a slowdown. And while most companies have managed to add new clients-Infosys landed contracts from SunAmerica, a financial services company and the UK's National Health Service; Satyam announced a three-year alliance with CSC; and Wipro bagged a contract from Santera Systems-some analysts, refuting Nasscom's claim about billing rates, maintain that price-constraints could take the sheen of new business. ''In terms of volume, we have seen the worst, but price-improvements will lag volumes by 2-3 quarters,'' warns Bhupinder Ahuja, a Vice President at Deutsche Banc Alex Brown. Thus, while Infosys' volumes have grown 3.4 per cent, the company has witnessed a fall of 3.2 per cent in its billing rates. ''The revenue models of it companies are moving in a direction where more gains are from volumes than prices.'' says Vetri Subramanian, Senior VO, Kotak Mahindra Mutual Fund.

Our recommended sentiment: cautious optimism ye eternal fence-sitters.

--Vinod Mahanta

E-NTOMOLOGY
2001's Big Bugs
Some 90 per cent of them were spread via email, so don't touch that porn mail in your inbox.

Win95.mtx, win32.nimda.a, Win32.Goner.A...sound familiar? Techies love to refer to the phenomenon as multiple propagation or social engineering, but for most of us, they're just plain evil-wicked enough to do irreparable damage to our PCs and data stored on them.

As technology gets more sophisticated, so do the viruses and their authors. The bugs of today are capable of doing more damage, and the crafty coders are developing techniques that make it possible for the virus to spread globally in hours.

Last fortnight, Computer Associates released its list of the top 10 viruses of 2001. Which one laid your pc low-or did the most damage? Everybody who uses email would have at some time been a victim of these viruses, since 90 per cent of these were spread via email.

CA's prognosis for 2002: more devastation. So put up those firewalls and arm yourself with anti-virus solutions. Stay informed about the latest threats, and update your operating systems and applications. A bit of common sense would help too: for instance, don't get excited by those unexpected porn invites in your inbox. Once you delete them, remember to empty the recycle bin too.

-Brian Carvalho

BLOCS
Whither Rupee Zone?
Despite some noise at the recent SAARC summit, a South Asian trading block remains the stuff of dreams.

The Kathmandu summit: a trading block is still a pie in the sky

On paper, an economic union of countries that together represent a fifth of the world's population looks impressive. But despite the fact that a trading bloc (it's even been christened, South Asian Free Trade Zone, or SAFTA) is the ultimate objective of the South Asian Association of Regional Co-operation (SAARC), the union is likely to remain on paper for some time.

One reason for that is the relationship between the association's two largest countries, India and Pakistan. With the December 13 terrorist attack on India's Parliament House exacerbating things that weren't very good to begin with, economics wasn't a subject that was discussed very much at the recent SAARC summit-the 11th of its ilk-hosted by Nepal. The consensus among political and economic analysts is that SAARC is little more than a 'talking shop'. Thus, on the economic front, the 11th summit saw just the adoption of a resolution on finalising the draft treaty for a free trade area by end-2002. And, despite all sorts of concessions offered by the member-countries-Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka-intra-SAARC trade constitutes a mere 3 per cent of the total trade in the region.

Trade won't grow in a hurry: the concessions offered by most countries are strictly symbolic; there seems to be greater interest in improving bilateral trade than in creating a trade zone; and all members have irritating pre-occupations at home.

That apart, the seven countries that constitute SAARC aren't, even if all their economies act in concert, a great global power. Their total share of global GDP is a measly 0.8 per cent; that of global trade, around 1 per cent. This may be a good year to abandon plans of a economic union.

--Ashish Gupta

SURGERY
Them Mean Old Reconstruction Blues
An asset reconstruction company may not be the panacea the government views it to be.

March 2002 is when the government expects to solve the knotty issue of non-performing assets in the financial sector. The miracle cure? An asset reconstruction company (ARC) with a corpus of Rs 200 crore that will be up and running by the end of fiscal 2001-02. The concept of an arc is relatively simple. It has been successfully tried out in the United States and in several South-East Asian countries; in India, it gained currency after Finance Minister Yashwant Sinha's announcement of the formation of an arc in his 1999-2000 Budget.

The modus operandi of an arc is straightforward: it pays a realisable value for the NPAs of public sector banks, and transfers them into its own account. The banks end up with a cleaner balance sheet; and the arc will take care of the recovery. So, where's the catch? Ask Ashwani Puri, the head of the corporate finance practice at consulting firm PricewaterhouseCoopers, and he rattles off five things that could go wrong.

First, can the arc provide the right kind of 'realisable value' to banks for their NPAs? If it can't, then banks are better off keeping the debt on their books. Second, the success of any arc will depend to a large extent on the capability and skill of the persons manning the company. Thus, it is important that the government selects people with the requisite skill-sets instead of employing, as it is wont to, retired bureaucrats and bankers from the public sector banks.

Third, unless the arc is provided with certain special powers or rights to proceed against defaulters, it makes little sense to have an arc at all. ''After all, in the absence of proper insolvency, bankruptcy, and foreclosure laws in the country, it will be virtually impossible for the arc to carry out its recovery functions,'' argues Puri. Fourth, the arc needs to be protected from all kinds of litigations to ensure its proper functioning. And fifth, it will need to be insulated from government interference.

Thus, while the government could well stick to its deadline and create an arc by March, whether it will give it the necessary freedom and autonomy is the million-dollar question. After all, coalition politics has its own compulsions.

-Ashish Gupta

OBITUARIES
Quietly Fades the Bull
Harshad Mehta, 1953-2001. His head didn't roll. His heart just stopped beating.

Harshad Mehta: in the end, he got away

Look at it this way: if harshad Mehta had been given a chance to pay back the Rs 4,000-odd crore he allegedly pinched during the securities scandal of 1991-92, perhaps there wouldn't have been the need for dragging on for nearly a decade with the countless cases that were miles away from conviction. Perhaps the Biggest Bull would still be alive.

But criminals, of course, don't get such chances. And, at the end of the day, HM had committed a crime by diverting bank funds into the stockmarket. So when Mehta told former finance minister Manmohan Singh that he had a stash that was big enough to square off all his liabilities, nobody believed him. Nobody was willing to give him that chance.

For, after all, Harshad Mehta was the public face of the scam. A head had to roll, never mind that sundry other rogues (powerful ones no doubt) were involved. But, despite years of courtroom theatrics, HM's head didn't roll. His heart just stopped beating.

The April 1991-June 1992 period has been forgotten, making way in the mind for the more recent pillages on Dalal Street. Soon Mehta too will be erased from public memory. Except in the minds of those who watched their acc shares zoom from Rs 500 to a mind-boggling Rs 10,000. They won't forget him.

Brian Carvalho

Back To Earth
The green lobby loses an indefatigable champion of its cause.

Anil Agarwal: hardline green evangelist

Euro II/III/IV. CNG. SPM. From semi-literate bus drivers in Delhi to top managers in the auto and oil industries, politicians and bureaucrats-they all know the acronyms that Anil Agarwal gave to urban India. He died (age 54) from cancer, but Agarwal, an inspirational leader, pounded away at his laptop from his hospital bed and inspired his colleagues to continue the long, hard battle for clean air and plentiful water. These simple issues-and their enormously complicated processes-were the chief foci of the award winning NGO, Centre for Science and Environment (CSE), which he founded in 1980. Industry criticised Agarwal, a graduate from iit Kanpur and later a science journalist, for his hardline stand on clean air. But many, including the Supreme Court, agreed that desperate realities required drastic measures. He took ironic satisfaction in noting that he got the Padma Bhushan in 2000, the same year as Ratan Tata, whose diesel engines were a target of a bruising CSE campaign. But clean air was just one part of Agarwal's agenda. He was a strong advocate of rural development, and in 1986, was invited by Rajiv Gandhi to make presentations to his council of ministers on how forest and soil degradation was pauperising rural India. In 1987, the United Nations Environment Programme elected Agarwal to its Global 500 honours list. But Agarwal would have been happiest if he could have had the one thing he couldn't in his country's capital-a breath of fresh air.