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MARCH 13, 2005
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F&B Mythbusting
Just what is happening in India's booming food and beverages (F&B) business space? One helluva lot, according to Sujit Das Munshi, ED, ACNielsen South Asia. Log on for an exclusive column by him that doesn't just look at 'share-of-appetite' trends that F&B professionals cannot afford to miss, but also junks some preconceptions of the Indian palate.


McSwoop
McDonald's, with a new CEO back at heaquarters, is lowering a price bait to lure the budget-conscious Indian on-the-move bite-grabber. This fits into a broader strategy of multiplying customers that includes reaching out to McSceptics.

More Net Specials
Business Today,  February 27, 2005
 
 
POLICY WATCH
M............. Redux
It's that M word, Manmohanomics again. We're happy.
PM Singh: His scribbles spell work for ministries

Understatedness has become a trademark of the Manmohan Singh-led United Progressive Alliance (UPA) government. So, it didn't come as a surprise to anyone, leave alone the man's ministers when, on February 10, a missive from him, of must-dos-for-2005 described as "thrust areas for policy implementation", landed on their desks.

Waiting For Karat
Stick 'em up
The Market's New Watchdog

As follow-up, the letter said, an official from the Prime Minister's Office (PMO) would meet the ministers once every month to understand the progress on the issues mentioned in the letter. Singh's wishlist of sorts was also uploaded on to the PMO's web site as an online reminder to his colleagues. Understated it may have been, but the follow-up bit is downright aggressive for the 72-year old economist-turned-politician. Pulak Chatterjee, a joint secretary in the PMO, is the man who will monitor the various ministries and report to the pm (the letter itself puts down the reforms agenda for every ministry). "This is the Prime Minister's way of putting pressure on the ministries," says a senior official in the PMO. "There was just no other way."

Singh's To-do-list
Chemicals & Petrochemicals: Finalise petrochemicals policy; repeal drug price control act; regulate prices of drugs optimally

Telecommunications: Review spectrum allocation; finalise spectrum policy

Road Transport: Complete GQ and NSEW projects on time

Heavy Industry & Public Enterprises: Give profitable public sector companies complete managerial and operational autonomy

Civil Aviation: Finalise civil aviation policy; make progress on proposed restructuring/ development of Delhi, Mumbai, Bangalore and Hyderabad airports

Fertilisers: Rationalise subsidies

Labour & Employment: Amend labour laws

Disinvestment: Draft white paper on disinvestment

Economic Affairs: Draft comprehensive FDI policy

Singh's letter eschews the general in favour of the specific. For instance, the Minister of Chemicals and Petrochemicals, has been asked to finalise the National Policy on Petrochemicals, look into the repeal of the Drugs Control Act of 1950, and regulate the prices of drugs optimally. And the Minister of Telecommunications has been asked to review the allocation of spectrum to various services and finalise the spectrum policy. Other ministers have been allotted similar tasks (see Singh's To-do-list).

Judging from this list, the Prime Minister is clearly willing to go the whole distance on reforms: the Minister of Fertilisers has been asked to rationalise subsidies; the Minister of Labour, reform labour laws; and the Minister of Finance, draft a comprehensive Foreign Direct Investment (FDI) policy. There's a sweetener for the communist parties (see Waiting For Karat on page 46) that support the UPA government. All ministers have been asked to deliver on promises made in the National Common Minimum Programme (NCMP), a set of policy guidelines for the government that was drafted last year with the active participation of the communist parties. Manmohanomics is an oft-used word, but if this isn't manmohanomical (an adjective entirely more healthy than Machiavellian), nothing is.


SELF WORTH: PRAKASH KARAT
Waiting For Karat
The new chief of the reds could make things tough for the government.

Should someone launch a game show on the tube called Know Your Communists, and should it become as popular as Kaun Banega Crorepati? (two imponderables, but indulge this writer for a minute), chances are (three, and there will be no more), identifying Prakash Karat from a photograph would definitely be the million-dollar question. That's because, unlike his colleagues Jyoti Basu, the former Chief Minister of West Bengal, Harkishen Singh Surjeet, the General Secretary of the Communist Party of India (Marxist), CPI(M), and a player in Delhi's power circuit, and Sitaram Yechury, the articulate public face of the party who spends a considerable amount of his time in television studios, Karat is a near-recluse who prefers not to be seen at all.

That is set to change early April when the CPI(M) meets in Delhi to elect a new Central Committee and Politburo; Karat is a shoo-in for the post of General Secretary; and with the communists critical to the ruling United Progressive Alliance's (UPA) ambitions of staying in power, he cannot avoid either the publicity or the profile that comes with the job. Power, the third P of politics, doesn't figure in that sentence because powerful Karat has always been. In 1997, it was he who dissuaded Jyoti Basu from accepting the post of Prime Minister, and, more recently, last year, it was he who discouraged the communist parties from becoming part of the UPA. Is Karat as rabid as he is being made out to be, and will he succeed Surjeet? The man himself says reports about his succession are "speculation by the media". "His understanding of the basic principles of the party makes him a hardliner for the others," says a fellow member of the Politburo. "He represents the best democratic tradition of our party," gushes another colleague.

"I stand for what my party stands for," says Karat himself, referring to his widely-publicised criticism of the UPA's ability to implement the National Common Minimum Programme (NCMP), which was drafted last year by the coalition in consultation with his party. "Measures in the CMP that concern the country and people are yet to be implemented, and those executed have been done in a half-hearted fashion," he adds. That's not his personal view of course-in a telephonic interview with this correspondent from Mallapuram in Kerala (over the terrestrial telephony network; Karat doesn't carry a mobile phone), he declined to answer any personal questions-but "the party's assessment of issues". Still, his comments do not mean the CPI(M) will withdraw support to the UPA in April itself. "He is far more flexible and pragmatic than the media makes him out to be," says Congress Member of Parliament Jairam Ramesh. "He is a very serious-minded and thoughtful individual." The CPI(M) itself insists that Karat is progressive and points out that he worked on discarding the democratic centralism (the decision of the centre is binding on the state) principle for the state, and on incorporating women's issues (his wife of 30 years, Brinda Karat, is a communist and women's leader herself) in the party's draft for its Congress in 1998.

Influenced by Marxism while at Madras Christian College in the 1960s (he was later rusticated from the University of Edinburgh for a protest he participated in against apartheid in South Africa), Karat was a founder member of the students union of Jawaharlal Nehru University, a co-founder of the Student Federation of India at JNU along with good friend N. Ram, now Editor of The Hindu, and fought the only elections of his life, for the President of JNUSU in 1973 (he won) and 1974 (he lost). The winner of that election, Anand Kumar, now a professor of Sociology at JNU, regards Karat as "a long distance runner". "Allow him space and you will be treated to his depth of ideas," he says.

"There will be more emphasis on the party and our movement, and less on politicking," says a member of the CPI(M) on the possible impact of Karat's election as general secretary. "Without doubt it will be tougher for the Congress." Karat himself would like to believe that opposition (to ideas) brings out alternatives (that weren't thought of before) but insists that "it is the government's responsibility to run with stability and not ours".


Stick 'em up
India discovers a new fondness for a made-for-television hockey league.

ESPN's Venkateish: The keeper of faith

Between January 13 and February 13, some four million viewers (per match) watched the live telecast of hockey matches (there were 20 in all) between teams named as evocatively as Hyderabad Sultans, Maratha Warriors, Bangalore Hi-Fliers, Chennai Veerans and Sher-E-Jalandhar (there were 10 teams in all). In television trade lingo that translates into average TRPs (television rating points) of 0.46; that's a significant figure in a country where news channels routinely register TRPs in the 0.10-0.12 region, and even the typical K-soap on Star Plus, the channel that telecasts 36 of the top 50 programmes on the tube, does around 11.8. At one level, the four-million figure means Indians still adore hockey, the country's national sport and one in which it actually boasts eight Olympic gold medals (the last, alas, won way too long back in 1980) and lends credence to one theory doing the rounds that says that more Indians traipse to stadia around the country to watch domestic hockey matches than domestic cricket ones. At another, it means that the Professional Hockey League (PHL), a slick, for-television (and live audiences, but you get the picture) extravaganza replete with cheerleaders (Russian ones, for the first match), endorsements from popular brand ambassadors such as movie star Amitabh Bachchan and cricketer Sachin Tendulkar, and uniforms designed by one of India's top designers Aparna Chandra, has arrived.

PHL FAQs
Number of teams: 10
Total number of players: 160
Number of Tier I teams: 5
Number of foreign players: 13
Total player fees: Rs 30,90,000
Total cost: Rs 8.5 crore

Funds: All costs are underwritten by ESPN
PHL ownership: Indian Hockey Development Private Limited, in which ESPN Star Sports owns a 49 per cent stake and the Indian Hockey federation, 51 per cent
Advertising revenues: Rs 6-10 crore (estimate)
Total number of viewers for all matches: 4 million
Title sponsors: ESPN is searching for one
Team sponsors: Perfetti's Mentos (Maratha warriors), Western Union (Sher-e-Jalandhar and Chandigarh Dynamos), GSK's Boost (Hyderabad Sultans).

The presence of 13 foreign players may have helped, as may have a new 4 X 17.5-minute quarters format, live coverage with as many as nine cameras, time-outs and strategy sessions (all televised again), smart uniforms, and the fact that India was playing no cricket at the point in time. So, by the time the Hyderabad Sultans defeated Sher-E-Jalandhar to win the tournament and the Rs 30-lakh prize that went with it (overall prize money: Rs 71 lakh), Indian Hockey Development Private Limited, a 51:49 joint venture between the Indian Hockey Federation and ESPN Star, had proved that a well-packaged league, complemented by the right kind of television muscle, could work. PHL still doesn't have a title sponsor, but its 20 matches attracted some 280 minutes in advertising (not all of it sold), which, by some estimates, translates into Rs 6-10 crore in revenue. The league has been popular enough for Adidas, the kit sponsor, to have uniforms and other merchandise "move from the shelves really fast" across its 74 stores, according to Andreas Gellner, Managing Director.

If timed well (read that as in non-cricket season), the PHL could succeed. "Most kids grow up playing three games in school: cricket, hockey and football," says R.C. Venkateish, Managing Director, ESPN Software. "The opportunity is huge." Advertisers think so too. "Cricket gets prohibitively expensive," says Anita Nayyar, Executive Director, Starcom Worldwide, North Operations, a media specialist. Then, there is the question of audience fit. Punjab, a region where hockey is hot (hotter than cricket, some say) is an important market for Western Union, a money transfer company (reason: the Punjabi diaspora). Not surprisingly, the company sponsored the two Punjab teams in the fray. That's opportunism. Actually, so is the PHL, and if it works well enough, it could mean another Olympic gold for India in hockey in the next few years.


The Market's New Watchdog
It's Meleveetil Damodaran, the magician who turned around UTI and IDBI

SEBI's top cop: A tough stance

For some time in the middle of February, it looked like G.N. Bajpai would get an extension, albeit a three-four month one, as head of stock market regulator Securities and Exchange Board of India (SEBI). The Finance Minister was busy with the budget, and Planning Commision chief Montek Singh Ahluwalia, who oversees the appointment of regulators, was apparently not keen to hand over the job to a retired bureaucrat as past governments have been wont to.

However, things worked out differently, and on February 18, M. Damodaran, an Indian Administrative Service officer (1971 batch) took charge as the fifth Chairman of SEBI. The man has acquired a bit of a reputation as a turnaround artist, what with his achievements at UTI and IDBI, the first of which he took over in circumstances that were far from ideal (the institution had frozen transactions on its flagship fund, US-64, following some unwise investment decisions allegedly at the instance of its previous chairman).

While Bajpai's tenure saw the operation of Indian stock markets reach new levels of efficiency and transparency, it was also marked by an inability to punish defaulters (some 22 orders of SEBI have been overruled by the Securities Appellate Tribunal in the past 12 months alone). Damodaran would do well to address this. His comments soon after taking over indicated that the man was aware of the challenge. He promised "swift and heavy" retribution for "mischief makers".

 

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