Sceptics, eat your heart out. The Indian currency's recent gains versus the US dollar may be no flash in the pan. For weeks, as the rupee climbed against the dollar, the doubters kept pointing to the currency's depreciation against other major currencies such as the Euro and Pound as proof that it wasn't intrinsically strong. They were right-then. For about six weeks now, the rupee has been getting dearer against all the major foreign currencies (See All-round Gainer), making the most gains against the Euro.

One of the reasons for the rupee's steady climb is the strong inflow of FII money. A billion dollars (Rs 4,600 crore) has come in the last six weeks. But there's no doubt that the rupee's gains go beyond mere supply-demand economics. Says Jamal Mecklai, CEO, Mecklai Financial and Commercial Services: "The rupee has intrinsic strength and the factors that helped it to appreciate against dollar in the past still remain." In other words, the arbitrage opportunity (US interest rates are still lower than India's) still exists, and this will continue to attract investors. So, at least in the medium term, reconcile yourself to living with a super rupee.

-Narendra Nathan

Buckle Up for Ute Fest
A clutch of utility vehicles is all set to hit the Indian roads.

Honda Siel CR-V: Perfect for the monsoon

Your next car may actually be a utility vehicle. Why? The segment is set to explode with a variety of models to suit a range of pockets. By the end of this month, Honda Siel will launch its CR-V, a sports UTE priced between Rs 14 lakh and Rs 15 lakh. Come August, Hyundai Motor India will roll out its much-awaited Terracan, with a sticker price of Rs 18-19 lakh. General Motors India, which has been on an overdrive with new launches, is driving in with its Isuzu Panther around the end of this year. Ford India also has plans of entering the segment, possibly with the seven-seater SUV, Everest. You can also expect either the Landcruiser or the Prado from Toyota Kirloskar. Not to be outdone, Tata Engineering is working on new platforms for its Sumo and Safari.

The MUV market, which comprises vehicles like the Tata Safari, Sumo, Toyota Qualis, Mahindra Bolero and Scorpio, already boasts monthly sales of about 8,000 units (the Qualis lords over a third of the market). But the SUV segment, defined by snazzy wheels like the Suzuki Grand Vitara, Mitsubishi Pajero, and the Chevrolet Forester, is a budding market. Currently, less than a hundred SUVs are sold a month, but the numbers are expected to climb to more than 300 a month. GM sells around 25 to 30 Foresters a month, and Maruti already has orders for 150 Grand Vitaras. With more UTEs rolling in, competition will get tougher. Bad news for manufacturers, good news for customers.

-Swati Prasad

McCann's Misery
Where's the business?

Sorab Mistry: He says things are par for the course

Even as its chairman & CEO Sorab Mistry was making the news with his appointment as the parent's South East Asia head, based out of Singapore (he continues to oversee the Indian operation), and even as its National Creative Director collected the agency's first-ever Gold Lion at Cannes, things went wrong for McCann-Erickson India back home. The agency asked 25 to 30 staffers in its Delhi branch to leave, the fallout of a combination of misfortunes.

Last year the agency lost the Reckitt-Benckiser, Adidas, and Gillette accounts, all from international realignments, and the General Motors business. And it failed to bag any new business of note; the fiercely pitched-for Samsung account went to Grey Worldwide and Cheil Communications. BT understands that some employees had suggested an across-the-board rationalisation of compensation which was shot down by the senior management team. "Every business goes through contraction and expansion," snapped Mistry when this writer contacted him. "What's the big deal?," he added, neither confirming nor denying the reported downsizing.

What made things worse for McCann was the decision of Coca-Cola India, a key account, and one of India's most prolific advertisers to hack its ad-spend by 15 per cent recently. Since Mistry took over the reins of the agency in 1993, McCann has seen its business increase ten-fold; and even in the past two years, the worst for the industry, it clocked growth rates in excess of 15 per cent. Ironic, then, that when things start looking up for the industry-this year's monsoon looks promising, and industry has staged a smart recovery as evident in recent statistics of industrial growth-they go bad for McCann.

-Shailesh Dobhal

SELF WORTH
Room #134, North Block
Reserve Bank of India Governor Bimal Jalan may well occupy it someday.

Citizen Jalan: The Guv's new clothes may well have a Delhi label

Surely, it isn't too much of a stretch to visualise outgoing RBI Governor Bimal Jalan as India's Finance Minister? After all, the man is headed for the Rajya Sabha, and although he has made no display of his political leanings, most political parties would be only too willing to count him among their numbers, and more than happy to make him a minister. The 62-year-old who gave the sandals-and-long-sleeved-shirt-worn-outside-the-pants look more gravitas than was previously thought possible has always given the impression that he is more of an economist, and people of the ilk consider ministerhood a more natural career progression than, say, the stewardship of the central bank.

Still, India couldn't have asked for a better central banker. In November 1997, when Jalan took over the top job at Reserve Bank of India's Mint Street headquarters in Mumbai, things were, to put it mildly, a mess. The South East Asian crisis was raging, and the RBI was burning billions of dollars every week to keep the rupee from falling. Today, 68 months later-the second longest stint for a RBI Governor, after Sir Benegal Rama Rau, who was in office for 91 months-Jalan can be proud of his achievements, although the quiet banker with old-world notions of courtesy and modesty will probably give someone else the credit. India's foreign exchange reserves have surged to over $82 billion (Rs 3,78,922 crore), from $25 billion (Rs 1,10,904 crore) in November 1997; the bank rate is down from 11 per cent in January 1998 to 6 per cent; inflation, now hovering around 5.5 per cent, touched an all-time low of 1.5 per cent in 2002; and the rupee is continuing to strengthen not just against the dollar, but other currencies as well.

Along the way, Jalan has weathered several storms-Pokhran II and the sanctions that followed; the near-collapse of the co-operative banking system; a stock market scam in which several banks were involved; and 9-11-and weathered them well. Attribute that to his pragmatism and his unstated desire to be the best central banker ever. "Economic policy, no less politics, is the art of the possible," writes Jalan towards the end of his book India's Economic Policy: Preparing For The 21st Century. The pragmatist with a fondness for all types of classical music has managed the central bank along the same lines, never once allowing ideology to come in the way of what needed to be done.

Jalan would have made a good teacher, although he didn't stay long enough at the Delhi School of Economics, his first job after acquiring an M. Phil from Oxford U. In 1973, he joined the ranks of the government; Indira Gandhi's decision to name him the chief economic advisor to the finance ministry in the early eighties singled him out as a bureaucrat whose career merited watching. Since then, he has served in several important posts: Banking Secretary, Finance Secretary, Executive Director at both IMF and World Bank, and Member-Secretary, Planning Commission. Years of experience navigating the waters of public finance may have made it easier for Jalan to align the policies of the government and the central bank, but still stop short of explaining the felicity with which he achieved this. Only his statement about economics (and politics) being "the art of the possible" does. Surely, someone who understands that should have a successful run in politics?

-Roshni Jayakar

India's Coaching Czars
The competitive-exams-preparatory business in India is booming.

Career Launcher's Narayanan: HLL, here I come

A few hundred kilometres south-west of Delhi is Kota, an industrial city that is waking up to the potential of an entirely new industry. In 2003, 306 students of the city based Career Point (2002-03 turnover: Rs 32 crore) made it through the IIT-JEE (Indian Institute of Technology-Joint Entrance Examination), the portal to 3,800 B. Tech seats in the seven Indian Institutes of Technology across India; 611 students from another Kota-based institute, Bansal Classes, did. Kota is emerging as a hub of sorts for the business; as is Delhi.

The city's Career Launcher, a prep institution focused on the MBA space has 14,000 students on its rolls and registered revenues of Rs 23.1 crore last year. This year, its Chairman, 33-year-old R. Satya Narayanan claims, it will do at least 30 per cent more. All told, the Indian market for higher education (read engineering, medicine, management) prep courses is estimated at a whopping Rs 1,200 crore a year.

The one-man, one-room neighbourhood tuition shack hasn't been able to keep pace with the growth in demand; today, the business is dominated by companies such as Career Launcher and Bansal Classes. Why, NIIT's eGurucool (the company acquired this division for Rs 1 crore early this year and expects it to touch the Rs 100-crore revenue mark in three years), apart from having offerings in the engineering and, medicine, and prep segment, also targets students of Classes IX, X, XII, and XII with preparatory packages for school-leaving examinations. Many of these companies boast respectable turnovers. Delhi-based FIIT JEE, founded by IITian D.K. Goel earned around Rs 30 crore in revenues last year; another Delhi-based company pie (founded in 1999), did Rs 11 crore.

These are newer companies; oldies such as Chennai-based Brilliant Tutorials (it has a presence in every segment of the market) and Mumbai's IMS (it pioneered distance prep courses for MBA wannabes 26 years ago) are still going strong: the latter earned Rs 35 crore last year from preparing 37,000 students for their MBA entrance examinations, and the former is reported to earn around Rs 50 crore a year.

Attribute their state of health to the great Indian dream of higher education: on an average, around 6 lakh hopefuls appear for MBBS, BE/B.Tech, and MBA admission tests every year. Most of the candidates shell out anything between Rs 10,000 to Rs 40,000 for a preparatory course. Even after accounting for considerable capital costs, the net margin of a typical institute would be at least half that.

A prep institute is only as good as the showing of its last batch. "The key to success is good faculty and a strong focus on results," says Anil Umray, Director, pie. Most corporate players recruit their faculty from the iits and IIMs; experienced tutors could earn around Rs 24 lakh a year apart from perquisites. Career Point has 35 IITians in its faculty and its "research team analyses each year's examination to develop a strategy for students," according to Pramod Maheshwari, a IIT Delhi graduate who founded the institute in 1993; for the record, for three years running, Maheshwari has been the highest individual tax-payer in Rajasthan. Students with an eye on the main chance monitor the performance of institutes over years before making up their minds.

"I came all the way to Kota because Bansal has a consistent record of producing top-rankers at IIT-JEE," explains Rohit Deshpande, a wannabe B. Tech from Maharashtra.

The newer prep institutes (and older ones such as IMS and Brilliant) are run very much like modern professional organisations: they have departments devoted to product development, brand and marketing management, and technology. Career Launcher boasts a board that has six IIM graduates, and almost all its departments are headed by iim Lucknow and IIM Kozhikode alum. And most spend between Rs 3 crore and Rs 5 crore on advertising. "I want to become the HLL of education," says the company's Narayanan, an IIM Bangalore alumnus.

That's not something traditional educators would aspire to be. "Teaching should not have the trappings of a corporate entity," says 74-year-old Chukka Ramaiah of Hyderabad's Ramaiah Institute, which prepares students for IIT-JEE. The veteran's attitude may suit an institute that admits only 125, although 9,000 students appear for an entrance exam to select the 125. Hey, wonder who coaches the 9,000?

-Sahad P.V. with E. Kumar Sharma & Dipayan Baishya