JUNE 6, 2004
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Market Research Jitters
The big market research (MR) problem: people, when asked, often tell you what they think you want to hear rather than what they really think.


Maggi Five
Say 'Maggi', you get '2 minutes' in response. But the brand is talking '5' all of a sudden.

More Net Specials
Business Today,  May 23, 2004
 
 
A CEO's Exit
Hearts and votes, not investments, is Andhra Pradesh's new mantra.
Exit glass & chrome: Enter subsidies

This is one analogy former Andhra Pradesh Chief Minister N. Chandrababu Naidu will like: it isn't very often that shareholders revolt against a ceo who has created a $1 billion company, attracted investments of $500 million, and generated around 75,000 jobs. Yet, that's what the people of Andhra Pradesh did, booting out Naidu, a cm who preferred the title CEO, who, in his nine years in office, saw the state's software exports grow to Rs 5,000 crore from Rs 60 crore. "One of the most important achievements of Naidu was setting the state on the path of reforms, and positioning it as a destination for investment," says T.V. Mohandas Pai, cfo, Infosys Technologies. That, the Powerpoint-friendly politico did, charming Microsoft Chairman Bill Gates and former US-president Bill Clinton with his CEO-talk, and selling the state as the ideal location for everything from India's first International B-school (Indian School of Business) to the HQ of the Insurance Regulatory Development Authority (IRDA). "He had the vision (to position Andhra on the global it map)," gushes B.V.R. Mohan Reddy, the Chairman of Hyderabad-based Infotech Enterprises. However, neither Reddy, nor Shakti Sagar, until recently the President of Hyderabad Software Exporters Association believes there is cause for alarm.

The Manmohan Line
The Cost Of Inaction
An Immediate Agenda For The New Government...
Supermarket Secrets

FM 553.29
The Manmohan Line

There's rejoicing in some quarters about Manmohan Singh being the next finance minister. ''His consensus-building approach can win the support of the Left (the communist parties),'' reasons N. Srinivasan, Director General, Confederation of Indian Industry. The man himself isn't off to a great start. On May 15, he told a news channel, "Disinvestment, yes; privatisation, we have to think." One wag says this isn't surprising, given Singh's clear left-of-centre leanings when he was a professor at Delhi School of Economics. Still, this is the man who created an A-team of super-bureaucrats in the ministry that served not just him, but two of his successors. Hope springs eternal.


The Cost Of Inaction
For over three months, the business of governance has come to a halt.

There's a cost to democracy and it could run into tens of thousands of crores. Since the elections were announced on February 29, all government departments have gone into hibernation. At one level, the government was loath to do anything that could affect its chances at the hustings. Thus, the state-owned oil companies lost around Rs 5,000 crore with the government refusing to allow them to increase the prices of petrol, diesel, kerosene, and gas to keep in step with international crude prices. At another level, the government put off major decisions. The people-friendly ones (or electorate-friendly, to use an alternative term) would have attracted the ire of the election commission. Those related to reforms (such as labour- or power-sector ones), that of the opposition. And so, despite the fact that the economy seemed to be on a roll-at least, the macro-economic indicators seemed to suggest that this was the case-the government played coy, thereby missing an opportunity to push through some much needed laws (in policy-making as in cricket, timing is everything). Three months later, in mid-May, the momentum seems to have been lost.


An Immediate Agenda For The New Government...
...whoever it may be. And hey, we've left out the tough bit.

  • Introduction of the value-added tax regime. Even the communist parties are committed to it and it can well serve as a sign that the new government believes in reforms.
  • Creation of a oil & gas regulator, which can decide on pricing, rather than leaving this critical issue to the political leadership which is vulnerable to populist sentiment.
  • An increase in the Foreign Direct Investment (FDI) ceiling in the telecom sector to 74 per cent from the existing 49 per cent as this can only help the cause of teledensity.
  • The removal of the 10 per cent cap on voting rights (foreign investors can hold 74 per cent, but their voting is capped at 10 per cent) in private banks, a move that could kick off some much-needed M&A activity in this space.
  • The adoption of an open-skies policy and the privatisation of the Mumbai and Delhi airports (as planned).
  • The completion of the Golden Quadrilateral project, arguably the most successful infrastructure project in recent times.
 

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