Truckloads of wheat: Another scam?

The sheer physical impossibility of it all is striking: it would have taken a million truckloads to transport the five million tonnes of wheat that have strangely gone missing from Food Corporation of India's godown and channel in Punjab. Food Minister Sharad Yadav has expectedly ordered a probe and a report by the end of March. Ministry officials attribute the problem to an accounting error but that hasn't stopped Yadav from asking FCI's Senior Regional Manager (In Charge), V.K. Singh, to go on leave pending the investigation that will look at issues such as bulk sales and movement of wheat from the FCI godown to ports. It is unlikely the Rs 3,200 crore worth of grain will ever be found, provided it existed in the first place. The FCI's books have already been corrected to reflect the missing five million. It isn't another Enron, but this sure is a large accounting error.

-Ashish Gupta

DUMP
Busman's Grouse
Makers of commercial vehicles believe a 5 per cent reduction in tariffs could open the door to cheap imports of used trucks.

Dumping Dread: For now, all these trucks are Indian

Not everyone is happy with Jaswant Singh's first budget. The makers of commercial vehicles believe his decision to prune import tariff on second-hand commercial vehicles from 30 per cent to 25 per cent could result in a surge of such imports from developed nations. One might think a 5 per cent cut can't be all that threatening but as R. Seshasayee, President, Society of Indian Automobile Manufacturers, and Managing Director, Ashok Leyland, puts it, ''you never know at what level (of tariff) used vehicles will start being dumped into the country.'' Manufacturers fear that this could hurt the industry's fortunes that have been on the ascendant in 2002-03 and point to the high import tariff on used cars (105 per cent) as justification enough for a rollback. For the record, China doesn't figure in the list of countries that could dump their used vehicles in India-Chinese trucks cost a lot and their emission levels are way too high.

-Swati Prasad

Q&A
''India Should Market Itself''

Arshad Zakaria: It's a difficult market

He is one of the most powerful Indians on Wall Street. Arshad Zakaria, 40, Executive Vice President of Merrill Lynch and President of the firm's Global Markets and Investment Banking group was in India recently. Zakaria, who says he is ''more optimistic about the Indian market than I have been in a long time'', met with BT's Roshni Jayakar. Excerpts:

In terms of private equity flows, how do you see the emerging markets?

It is difficult to predict flows on a short-term basis. But if you look at the trends in the last few years, emerging markets have been cyclical in terms of private equity flows. Going ahead, you are unlikely to see the return of those high returns in the US and the Europe. But countries like India are going to become more attractive than they were in the period of 1999-2000, when the US market was growing fast. Technology is an interesting sector. Outsourcing and bpo are showing spectacular growth.

Any particular observations on India?

I spent a lot of time visiting Indian corporates and my view is there is more buoyancy in corporates. Good companies are showing topline growth. In India, technology and services-related companies offer significant opportunities.

What should India do to take advantage of the global opportunity?

Structurally, global investors are now going to be looking all over the world for investment opportunities. It's a period of opportunity for India to market itself-in terms of liberalisation and infrastructure-and put its best foot forward.

GRAPEVINE
The End-Game Begins
IDBI's reverse merger into IDBI Bank may finally happen.

IDBI Bank's Chadha: Mum's the word

You won't find IDBI bank CEO Gunit Chadha, a former Citibank fast-tracker, commenting on the reverse merger of IDBI into IDBI Bank. That, he says, is up to the financial institution that controls 57 per cent of the bank's equity, and the government. What he will comment on is the rumour that he is quitting the bank. ''I am very much here,'' he says. ''My contract expires in August 2003.'' The man who has quit is Chairman M.S. Verma. An executive at IDBI claims it was Verma who repeatedly scotched the reverse merger. Now, with him gone, it looks like IDBI Chairman P.P. Vora will become the bank's chairman and spearhead efforts towards the union. Indeed, the merger is as good as done in the minds of IDBI execs. Some of them are going through a training programme on banking at the National Institute of Bank Management, Pune. And the Parliamentary Standing Committee on Finance doesn't seem to have any objection to the merger. Still, if the merger goes through it will take some doing for the new IDBI Bank to become as efficient as the old-something for which Chadha, who inherited a mess of a bank, can take credit. He's silent on that front too.

-Roshni Jayakar and Shilpa Nayak

UPSTART
Fresh's The Word
RPG Retail has fresh plans for the market.

Food World: South of the border

One would have expected food world, RPG Enterprises' successful retail foray of seven years-there are some 88 Food World outlets across 11 centres-to think of moving to the northern and western markets. That, says RPG retail CEO Raghu Pillai, will have to wait till 2005, by which time the chain would have grown to 125 stores. Instead, the company plans to take its hypermarket chain, Giant national (at a cost of Rs 175 crore over the next five years), and launch Fresh World, a predominantly-perishable-produce chain. The next few years will see the company putting down 50 such stores, each at a cost of Rs 10-12 lakh. And yes, the effort will be restricted to the south.

-Nitya Varadarajan

PROTECTION
Our Valuable Employees
Wipro, Infy, and HCL Tech take out sizable insurance policies for their employees.

Group insurance isn't an alien concept in India. For instance, Bangalore-based beer major UB has taken life cover of Rs 16.5 crore for around 550 employees, an average of Rs 3 lakh an employee.

That number is chump change when compared to the Rs 876 crore for which Wipro has insured its 15,930 employees with Tata AIG, the Rs 1,400 crore for which Infy has insured its 14,000 employees with LIC, and the Rs 975 crore for which HCL has insured its 6,500 employees with National Insurance Company. That's only apt for an industry that swears its fixed assets leave for home every evening.

-Venkatesha Babu