Deepak Puri: The next big thing?

The Delhi-based company may have come late to the optical media party, but it's working some heavy duty charm on industry big-wigs. In particular, Sony, Philips, Kodak, and Hewlett-Packard, whom it is now partnering for creating the technology standards for the next big thing in optical media: the Blue Ray Disc, or simply blue disc. It wasn't easy for the Rs 1,100-crore, Deepak Puri-founded Moser Baer to get a seat on the committee. All committee aspirants are vetted and voted for or against by existing members, who must convince themselves of the applicant's ability to make path-breaking contribution. Apparently, Moser Baer, which entered the optical media business only in 1999, has already built up impressive process and technology knowhow. "We are not just on the committee, but will also be developing the essential patent," says Ratul Puri, the company's Executive Director.

What's different about the blue disc? Essentially that it will allow a whole lot more of information to be packed in on a single disc-something like 25 to 30 GB, which is as much storage capacity as that of an average home pc. That means your entire hard disc data can be stored in one or two blue discs. Also, since the blue disc will be "burnt" differently, it will have lesser image distortions, making your Matrix experience even richer. But don't get too excited just yet. The blue disc, or high capacity DVD as Puri calls it, costs almost $30 to make compared to $1 of a DVD. Besides, the blue disc player-the current version in Japan is only meant for professional users-costs $5,000. A commercially viable retail blue disc is unlikely to hit the stores before 2007, reckons Puri.

What after blue disc? Possibly one that stores a cool 100 GB. God bless tech monstrosity.

-Supriya Shrinate

Aviation's Dog Fight
An open-skies policy will boost the private carriers at IA's cost.

Rajiv Pratap Rudy: Indian Airlines is in for a rud(y) shock

By the time you read this, the Naresh Chandra committee would most likely have put out its report on a new civil aviation policy. And among other things, it would have recommended that the government remove restrictions on airline services-at least on regional international routes. In other words, introduce an "open skies" policy that the Union Civil Aviation Minister Rajiv Pratap Rudy has been championing for some time now. Prime Minister Atal Bihari Vajpayee agreed to open up Indian skies to ASEAN countries at the Bali summit earlier this year. So, it would take a minor miracle for the committee to side step the issue.

A lack of open skies has been made out to be at the centre of many aviation and tourism industry problems. For example, the poor tourist inflow into India is blamed on a shortage of seats coming into India. Also, the average airfare to and from India is said to be among the highest in the world. But the most potent weapon that advocates of open skies have been using is the dismal state of the aviation industry. Last year, Jet Airways and Indian Airlines announced losses near the Rs 250-crore mark, and Sahara is also believed to have racked up huge losses on a much smaller operation. While there are several reasons for the industry's losses, excess capacity has been cited as the major one. Allowing the private airlines to fly regional international routes will solve the problem handsomely. But Indian Airlines, which already flies international routes, will be badly hit. Not only will it lose passengers, but also potential profits, given that international routes are more lucrative. But, then, by deciding not to privatise IA, the government may already have sounded its death knell.

-Kushan Mitra

DASH BOARD

A
The low-profile but diligent Chairman and Managing Director of Sundram Fastners adds another feather to his cap by acquiring a precision casting unit in the UK. His other feather: For several years running now he has been one of General Motor's best vendors.

C+
Fine, Mumbai is the Hottest State for Business. The problem is that the enterprising state is also proving to be the hottest state for some unholy business. The Telgi scam had its nerve centre in the state, and CAT scam too was uncovered in Pune. Let's hope all that is just coincidence.

MOVE
HP Swoops Down On Digital

Som Mittal: Onto a new job

After denying it for months, Hewlett-Packard has finally announced a plan to take its software arm Digital Globalsoft private. Ergo, hp will be spending an estimated Rs 1,000 crore in buying back 50.4 per cent stake-or 16.4 million shares at Rs 750 a pop-that it doesn't already own. Explaining the move, HP's VP (Strategy and Corporate Development) Hans Lidforss said, "Software development is done both by hp and Digital in India. There is a conflict, which the merger will resolve."

Wakey, Wakey, HP. Last year when hp bought Compaq, Digital was already part of the deal. Then, many analysts had pointed out that since hp also had a large software business (Hewlett-Packard India Software Operations), it made sense to buy out Digital. But hp dithered.

With the change of heart, hp ISO and Digital should work as one. Where does that leave Digital's Som Mittal-a man who reinvented Digital (for long a hardware company) into a software major? According to Lidforss, he will continue to be the MD of the new software division. But whether that appeals to Mittal is another issue. Sure, Mittal will have double the number of people to oversee. But one would imagine that running a division is a lot less fun than heading a listed company on a roll. Maybe in the days to come, we'll know exactly how Mittal feels about it.

-Venkatesha Babu

Budget 2004: A Ready Reckoner

Jaswant Singh: Great expectations? Not really

Now that finance minister Jaswant Singh has his Budget Team in place-D.C. Gupta, Secretary (Economic Affairs), D. Swarup, Officer on Special Duty in the Department of Expenditure, N.S. Sisodia, Secretary (Financial Services), and Vineeta Rai, Secretary (Revenue Department)-what can we expect from Budget 2004. Given that it is an election year, not much.

Policy Initiatives: Announcement of poverty alleviation schemes targeting rural poor and marginal farmers; tax sops to the manufacturing, construction, and textile sectors; and an increased budgetary allocation for agriculture, defence, welfare schemes, and rural development.

Direct Taxes: There is unlikely to be any change in the peak income tax rate for individuals, domestic companies, and foreign companies. The implementation of the value added tax, hanging fire for the past two years, may be announced. Ha!

Indirect Taxes: The peak rate of customs duty will be brought down from 25 per cent to 20 per cent. This has been recommended by the Kelkar Committee and will bolster Singh's reformist credentials. However, the three-tier excise duty regime will stay, with some products moving from one slab to another.

Service Tax: The tax base will be widened with many more services (currently there are 51) being brought under the tax net.

The Fiscal Deficit: Higher tax collections and a larger Gross Domestic Produce will likely help the government reduce the fiscal deficit from 5.7 per cent (of GDP) to 5.1 per cent. However, the finance minister is unlikely to announce any significant initiatives to prune government expenditure.