Mallya can now find a foreign investor for Kingfisher...	Is Lee Scott, Wal-Mart's CEO, looking for an Indian partner...	Finally Jaipal Reddy allows FDI in FM stations

India has attracted foreign direct investment (FDI) of $49.72 billion (Rs 2,18,768 crore at the current exchange rate) and China, $60 billion (Rs 2,64,000 crore). Hold the bubbly, though. India's figure is a cumulative one and includes all fdi since 1990-91. China's is a yearly figure, for the calendar year 2004. One way to indulge in dissonance reduction (a term borrowed from the discipline of marketing psychology that describes a consumer's efforts to justify his choice of product or service when it is all too apparent that competing ones are much better) is to resort to the cliché about the Indian economy not being FDI-led (unlike the Chinese one).

The Manmohan Singh led United Progressive Alliance (UPA) government must think otherwise. It has started the current financial year, 2005-06, with a spate of announcements regarding FDI: those in retail, domestic aviation and fm radio stations are on, and an increase in the ceiling on FDI in insurance, from 26 per cent to 49 per cent, may well be. This could be one element of Singh's recipe for growth; after all, the man admitted, during a mid-year review of the Ninth Five-Year Plan that India's GDP growth for the period (2002-2007) would be well short of the targeted 7 per cent a year.

That, say some economists, is a generous view: the government had to do what it has done with its commitments to the World Trade Organization (WTO) regarding provision of free access to its markets, kicking in from 2006. "Let's wait," is the refrain from a clutch of political parties, including some of UPA's own allies and its rival Bharatiya Janata Party, a reform-oriented entity during its years in power (1998-2004) that has since discovered the merits of protectionism. None of these announcements have been forged into policies yet, they add.

Most people, then, have missed the Big Idea behind the announcements that have not merely come in a spate, but deal with sectors where bogeys such as social- and national-security have stayed the hand of successive governments from opening them up to foreign investment. "It was really the big organised domestic retailers that were trying to protect their turf all this while," says a consultant to the retail industry. "The impact on petty traders was just an excuse." That observation applies to other sectors as well. As a note circulated by India's Foreign Investment Promotion Board (FIPB) observes, the danger to small retailers comes as much from their large organised Indian counterparts as from foreign firms.

The announcements also redress some of the inconsistencies in India's FDI policies. For instance, although FDI was proscribed in fm radio stations, foreign institutional investors were allowed to invest in them (up to a ceiling of 20 per cent). This, when FDI was allowed (up to 26 per cent) in all other media, even direct-to-home broadcasting (20 per cent).

"The government's FDI philosophy seems to be linked to raising productivity and employment," says Rajeev Memani, CEO & Country Managing Partner, Ernst & Young. If so, that's a radical change from the days when efforts to attract foreign investment were good enough things by themselves, a sort of political scorecard for the government of the day. "Just opening stores is not retail," says Raghu Pillai, President, RPG Retail. "Big international retailers will make huge investments in the supply chain," he adds, explaining how they will generate employment.

There may be those disappointed that the UPA has been satisfied with small gains-in retail, for instance, the ceiling on FDI is 26 per cent and questions are already being asked about just how many foreign retailers would want to come in under such arrangements-but as Saumitra Chaudhury, Chief Economist at credit rating agency ICRA and a member of the Prime Minister's Economic Advisory Council, points out: "The government is just trying to get some traction to make headway here." May the force be with it.

-Shailesh Dobhal

SUB-RADAR
The APMC Angle

Quietly, a reform that could change the complexion of the Indian agricultural sector is under way. This is the amendment of the Agricultural Produce Marketing Committee Act by several states (around 16 have already agreed to do so by the end of April this year). Apart from creating a unified national market for agricultural produce, this should also enable such imperatives as contract farming. Then, there is the impact it will have on creating a market, and marketing infrastructure. These changes will attract investments by private sector companies in the sector and, hopefully, pave the way for the next wave of agricultural reforms. If all goes well, the result could well be another green revolution.

SECOND
The Rs 1,10,000-Crore Boom
With tele-density nudging double digits and telcos firming up ambitious investment plans, the great Indian telecom story looks set for a happy middle.

India, predicts the country's Minister for Communications and it, Dayanidhi Maran, will have 250 million telephone connections by December 2007. That should translate into a tele-density (phones per 100 people) of 22, up from the existing 9.13.

That number looks as impressive as the amount India's telcos are readying to invest in the business, upwards of Rs 1,10,000 crore, maybe more, over the next three years. Equipment makers, says N.K. Goyal, Chairman Emeritus, Telecom Equipment Manufacturers Association of India (TEMA), can look forward to orders worth Rs 1,60,000 crore in this period.

No one is challenging the minister's numbers, although A.K. Sinha, CMD, Bharat Sanchar Nigam Limited (BSNL), the government-owned telco that is the country's largest (it is also making the largest investment, Rs 75,000 crore in three years, although a significant part of this will go into upgrading its network), admits that its target, an additional 72 million subscribers in three years, is a difficult one. "The task of winning two million subscribers a month, with 85 per cent of them for our mobile services, is an uphill one."

The bulk of the new connections will be wireless. It costs a company between Rs 3,000 and Rs 4,000 to provide a mobile telephony connection; a fixed line, in contrast, costs Rs 12,000 (a reason why companies are pushing broadband services; the better returns will justify higher investment). And while private telcos are a lot more sanguine than BSNL-"If we have 200 million connections, we will have 50 million of that," says Sunil Mittal, CMD, Bharti Tele-Ventures-getting to 250 million will not be easy.

Most private telcos have thus far focussed on the metros (tele-density: 40) and urban centres (average tele-density: 27.56). Now they have to reach out to rural India (tele-density: 1.70) where they will compete with BSNL and aggressive newcomers such as Atlas ZTE, a company that will invest Rs 4,500 crore over the next four years and try and sell one million connections over the next two. Already, subscriber additions are slowing. Bharti's was down 22 per cent to 325,561 in March (BSNL's was up 298.6 per cent to 586,403).

All companies may benefit by sharing infrastructure. "There is bound to be duplication if everyone builds capacities," says Mittal. "We have been asking bsnl to share its infrastructure for a charge." However, the public sector firm isn't keen on this. That isn't the only irritant. Arpita Agarwal, a telecom consultant at PricewaterhouseCoopers, explains that a reduction in licence and spectrum fees will help catalyse the next wave of expansion. Maran shrugs these off. Demand alone, he reckons, will suffice.

-Kumarkaushalam

Water Policy: At Sea
A water crisis awaits India in 2025.

Circa 2025: Water, water everywhere, nor any drop to drink

The facts are startling. According to projections made by Population Action International, a non-profit policy advocacy group that is working to strengthen public awareness, more than 2.8 billion people in 48 countries will be facing water stress or scarcity by 2025; 25 years thereafter (read 2050), the number of water-short countries is likely to increase to 54, affecting nearly four billion or 40 per cent of the projected global population. Things look no better for India. The per capita annual availability of fresh water is down from 5,177 cubic metres (cu. m) in 1951 to 1,600 cu. m, and could fall further to 1,341 cu. m in 2025. The minimum per capita requirement is 1,700 cu. m per annum. "It could get worse simply because water in India is considered everybody's right, but nobody's responsibility,'' says Anindo Chatterjee, a consultant with the Delhi Jal Board who is helping the capital put in place a 24x7 project aimed at ensuring that every resident of the National Territory of Delhi has water 24 hours a day, seven days a week by 2015.

But currently the scenario is scary. The supply network is crumbling, with many of the water lines getting contaminated by sewage lines. Slum lords control distribution of water in many areas of Delhi and other parts of the country, and large parts of the population are unwilling to pay enough to even cover the operating costs or to use this finite resource responsibly. The highly subsidised irrigation for agriculture has only added to the burden of the local authorities.

India's complex bureaucratic structure doesn't help matters either. While drinking water for the villages is the responsibility of the Ministry of Rural Development, drinking water for cities and towns comes under the purview of the Ministry of Housing and Urban Development. And it is the Ministry of Water Resources that is concerned with surface and underground water and also with the supra project in terms of linking of river waters. So there is hardly any coordination between the various ministries. If India doesn't get its act together soon enough, its next civil war may be fought over water.

-Ashish Gupta

IPOS
Will They Boom?

Last year was the best ever for India's primary markets. Compared to the Rs 2,194 crore mopped up in 2003, new issues raised a record Rs 30,511 crore. According to Prime Database, a Delhi-based agency that tracks new offerings on the bourses, 2004's takings were almost as much as what companies raised between 1995 and 2003. More importantly, there were fewer issues than average, but of bigger size. There were three issues of Rs 5,000 crore each. Will 2005 do any better? Despite the Sensex swooning the past fortnight, Prime reckons that as much as Rs 40,000 crore could be raised from the markets this year. The big variable, however, is public sector issues. Last year, of the Rs 30,511 crore raised, Rs 20,218 crore was by public sector units. "Offerings from PSUs (will) also strengthen (the) narrow secondary market, which is marred by excessive speculation and volatility," says Prithvi Haldea, Prime's Manging Director, in a release. Now let's just hope the secondary market holds up.

Weekend Action
TV channels are focussing on weekend fare.

Television programming heads are gunning for your eyeballs on weekends. Says Ajay Vidyasagar, Senior VP (Marketing), Star Plus: "Till a year-and-a-half ago, we were trying to establish our weekday dominance. Having done that, we have now turned our attention to weekends." Star Plus has launched LoC-Life Out Of Control in a weekend slot, which opened to a TVR (television rating) of 5.47. "The idea is to have differentiated programming compared to soaps," says Tarun Katial, Executive VP (Programming & Response), Sony Entertainment Television, which airs the popular serial cid on Fridays.

Zee was among the first to target weekend viewership with its Antakshari show. There are also various award programmes and tailor-made shows, like Star Holi Utsav, which bring in TRPs (televison rating points) comparable to weeknight programming. Zoom, which was launched a few months ago, telecasts its best shows over the weekends. It has also introduced weekend editions of popular weekday shows like Popkorn.

Channels are casting their nets wide and including as many genres as possible. Since it's not easy to break the stream of popular soaps during the week, it makes sense to introduce non-soap shows over the weekends. Zee's Business Baazigar is scheduled to be telecast over the weekend and Kaun Banega Crorepati (KBC) II comes back in August as a weekend show. "KBC will redefine the weekend audience just as it redefined the weekday audience," says Vidyasagar. We're waiting. Let the airwaves crackle.

-Priyanka Sangani

3...2...1... Blast Off
For $20 million you can too.

The Final Frontier: So-youz want space?

When it comes to exotic holidays, if you have $20 million (Rs 88 crore) to burn (literally), the sky is the limit. Well, actually, it isn't. That kind of money will buy you 10 days on the International Space Station (ISS), 400 km above the earth's surface. It will also include six months of intensive training, a return trip on a Soyuz rocket and all meals. As for the view...

All these claims are made by Eric Anderson, CEO, Space Adventures, who happened to take a mundane international flight to Delhi not too long ago. Now before you write off the gentleman as a kook, Space Adventures did send American businessman Dennis Tito and South African entrepreneur Mark Shuttleworth up to the ISS. "We are the only company to send someone into space," boasts Anderson.

Strangely, Anderson hasn't been on a rocket himself, but he is confident that the advent of new sub-orbital vehicles like Burt Rutan's SpaceShipOne will open up space to many more people. "Space is defined as starting at 100 km above the earth. While we are still a long way from seeing private vehicles going into orbit, sub-orbital flight is a reality and I believe in the next two-three years a lot of people will be taking these flights at around $100,000-200,000 (Rs 44-88 lakh) a pop and we will be their travel agency." Space Adventures proposes to lease space on flights operated by a variety of companies, including Richard Branson's Virgin Galactic, and resell them.

If you want a taste of the real deal, the first available seat on a Soyuz rocket through Space Adventures is in late-2006 or early-2007. "It is the ride of a lifetime," promises Anderson, and for once the sales pitch might actually be bang on.

-Kushan Mitra