What: Hutch's 'Chota Recharge', a prepaid voucher that starts as low as Rs 10

Uniqueness: There is no processing fee if the service is renewed within the validity period. The only deduction is the service tax of 8 per cent

Why: Apparently, research shows customers hesitate to renew because of the high processing fee; for the record, 80 per cent of India's mobile telephony users are prepaid-customers

Effect: Another game-changer in mobile tariffs that are already amongst the lowest in the world

Opinion: "This pricing innovation will bring a significant change in the prepaid industry," says Sanjoy Mukerji, Operations Director, Hutchison Essar, Delhi

-Sahad P.V.

Jingoistic Beat

Who: Karnataka Rakshana Vedike (Karnataka Protection Forum)

What: Protesting outside Infosys Technologies' campus at Electronic City on September 27

Why: To demand 30 per cent reservation of jobs for Kannadigas as recommended by the Sarojini Mahishi Committee report

Prospects: Implementation of the report's recommendations are unlikely. More than 70 per cent of Bangalore's 7.2 million population is non-Kannadiga.

Opinion: "The IT companies respect meritocracy. Our recruitment policy is fair, transparent and based on merit," says N.R. Narayana Murthy, Chief Mentor, Infosys

"We will not allow anybody to indulge in violence. All necessary protection will be provided to the industry," says Shankar Linge Gowda, IT Secretary, Government of Karnataka

-Venkatesha Babu

Outsourcing, Ahoy!
Of branded manufacturing now.

Videocon Chairman Venugopal Dhoot: Trendsetter

When Swedish white goods major Electrolux AB turned over its ill-fated, loss-making Indian subsidiary, Electrolux Kelvinator India, lock, stock and brand to Videocon Industries three months ago, little did it realise that it was pioneering a trend. In the last week of September, Italy's Fiat Spa announced a mega alliance with Tata Motors that will involve closing down its plants in India and piggybacking Tata Motor's manufacturing and distribution facilities to manufacture and sell its cars in India. Then, there are reports that Japan's Matsushita is looking at Godrej Appliances for a similar distribution (even equity) alliance for National Panasonic India's Panasonic brand of audio and visual products.

So, what gives? Perhaps, this 'outsourcing' is a reflection of the inability of some foreign players to make much headway in the Indian market even after years of trying. Yet, a booming consumer market makes a complete exit not just hard-to-stomach for any big global brand, but also difficult to explain to the folks (and shareholders back home), not when everyone is singing the Chindia story. Maybe, these three examples will show the way out for tens of other global brands that are merely surviving in India.

-Shailesh Dobha

Hutch On A High
The telecom major gears up for an IPO.

Hutch Essar MD Asim Ghosh: You get the message

It's consolidation time at Hutchison Essar. Two months after Essar Teleholdings announced a deal with Rajiv Chandrasekhar for the acquisition of BPL Mobile Communications and BPL Mobile Cellular, Hutch has acquired Essar's stake in the two companies for $1.15 billion (Rs 5,060 crore), besides Essar SpaceTel, which has applied for licences in seven circles, for $6 million (Rs 26.4 crore). The developments are seen as a precursor to the much-awaited IPO from Hutchison Essar. "We expect to complete the process (of the IPO) by the end of the current financial year," Essar Teleholdings' ceo Vikash Saraf told BT. With these acquisitions, Hutch gains a presence in all the 23 telecom circles and its total subscriber base tops 12 million. The valuation of Hutchison Essar following the mergers could be as much as $11 billion (Rs 48,400 crore, compared to Bharti Tele-Venture's market cap of about Rs 65,000 crore), with the Ruias of Essar owning 30.42 per cent stake in the company. Hutchison Telecommunications International's CEO Dennis Lui says the investment signals the commitment of Hutchison Telecom and the Essar Group to being a major force in the mobile telecommunications space in India. No one seems to doubt that now.

-Krishna Gopalan

P-WATCH
A bird's eye view of what's hot and what's not on the government's policy radar.

FOR A FEW HUNDRED CRORES IN TAXES MORE

They also serve who only stand and wait. Vijay L. Kelkar, former advisor to the Finance Ministry and author of two reports on reforming the country's tax structure, has waited long enough. Now, it seems, his labours may at last serve some purpose. The UPA government is desperately looking for money to finance its ambitious projects. So, Kelkar's reports are being dusted off the shelves to see if they contain some answers. If implemented, it could lead to the elimination of tax-induced distortions-the much-misused incentives for setting up industries in backward areas could be the first to go-generate additional revenues and ease the fiscal pressure on the government. The report envisages attaining a nominal growth rate of 13 per cent (real growth: 8-9 per cent per annum) by 2008-09.

KELKAR'S PROPOSALS

Kelkar: Resurrected » A single goods and service tax of 20 per cent » Cut corporate tax rate from 36.8 per cent to 30 per cent » Remove all area-based corporate tax exemptions » Have three slabs of customs' duties (5 per cent on raw materials, 8 per cent on intermediate goods and 10 per cent on finished products) » Cut depreciation rate from 25 to 15 per cent

NO TICKET TO RIDE

Relief might be around the corner for harried passengers and flustered businessmen. The government is planning to prune the powers of populist Railway Ministers (is it something about the corner room in Rail Bhavan that breeds a particularly pernicious form of populism?) and their babus. Their powers to fix ticket prices and freight rates are likely to be drastically cut. In an attempt to curb arbitrary and politically motivated pricing of railway fares, the government asked the Planning Commission to find a way of ensuring transparency in the procedures relating to it. The suggested solution: index-linked charges. In simple terms, it means ticket prices and freight rates will, henceforth, be linked to inflation. The government is expected to take a decision on this shortly.

LIFELINE FOR THE SMALL-SCALE SECTOR

The UPA government is doing its bit to encourage SMEs (small and medium enterprises). "Public sector banks will have to achieve a minimum 20 per cent year-on-year growth in credit to SMEs," says Finance Minister P. Chidambaram. The target: Rs 1,35,000-crore loans to the sector over the next five years against Rs 67,000 crore now. Also on the cards: a one-time settlement scheme to write off non-performing assets in small units. The scheme will be in force up to March 31, 2006.

-Ashish Gupta

P.M. Singh: To each, his own

ONE FOR THE STATES

The government seems to have realised what we always knew-what's sauce for the goose is not necessarily sauce for the gander. Prime Minister Manmohan Singh recently asked Agriculture Minister Sharad Pawar to draw up state-specific plans for agriculture; one-size-fits-all programmes, the norm so far, will no longer do. "It's important to have state-specific policies to raise farm production," Singh is reported to have said. Result: Krishi Bhavan mandarins are back on their drawing boards, working on special projects for individual states.

ALL FOR FOOD SECURITY

The government has decided to set up a National Rainfed Area Authority for the development of dry land and rainfed areas, which constitute 60 per cent of the sown area in the country. Food production has hit a plateau in some of these areas, and even declined in others. Hence, insulating them from the vagaries of the monsoons has become critically important for the country's food security. Prime Minister Manmohan Singh has asked the Planning Commission to prepare workable proposals to address this problem..

-Ashish Gupta