To say that the prime minister of a country like India has only 10 tasks to perform to ensure good times keep rolling, is a bit facetious. There's poverty, illiteracy, healthcare and any number of other such issues for the government to deal with. But the process of wealth creation in an economy is often determined by sentiment: Will things improve? Will more and more consumers be able to afford the goods and services being offered? Can businesses hope to operate profitably in the future? Since 2006 has just begun, we've compiled a list of 10 things that Prime Minister Manmohan Singh needs to do to keep investor and corporate morale up. Here's a reverse countdown:

10. Resolve the spectrum issue in telecom: A decision is needed to keep the sector booming, and help bridge the urban-rural divide in terms of teledensity. The pm has already set up a group of ministers to look into spectrum allocation to GSM and CDMA operators, but he needs to ensure that the decision is not just fair, but viable for the operators.

9. Ensure better implementation and monitoring of Bharat Nirman and National Rural Employment Guarantee Scheme (NREGS): To put such important schemes at #9 might seem ironic, but that's because the schemes seem too grand to be practical-especially NREGS. Yet, if the government can do a good job of its Rs 1,74,000-crore Bharat Nirman project, it may not have to talk of rural unemployment, since the scheme is aimed at boosting rural infrastructure and, hence, the rural economy.

8. Ensure modernisation of metro airports in a speedy and transparent manner. It's not just Delhi and Mumbai-where the modernisation plan has run into all sorts of problems-but Hyderabad, Bangalore, Chennai and Kolkata, whose airports need to be upgraded. There are just two key issues here: Promptness and transparency.

7. Develop a regulatory mechanism for public-private sector participation in infrastructure. For industry to become an active partner in India's infrastructure development in roads, ports, power and the airports sector, there is an urgent need to establish a robust and autonomous regulatory mechanism for these sectors. What would help is reviewing foreign direct investment (FDI) caps in this sector. Let's face it. We need FDI.

6. Pass on international oil price hikes to domestic users instead of making oil PSUs bear the burden: Sure, such a move could impact inflation and possibly investment, but it is inevitable. Higher LPG and kerosene prices must be passed on to consumers, besides which the pm should consider applying vat (value-added tax) on petro-products to make their prices uniform across the states.

5. Reduce fiscal deficit. The Central government's fiscal deficit is down to a benign 4.5 per cent compared to 5.6 per cent in 2000. But combined with the states', the deficit is a scary 10 per cent. That's making credit expensive for industry. The government has to reduce food and fertiliser subsidies, impose user charges on power and water in agriculture, and downsize the government.

4. Create a truly all-India market for free movement of goods: The controls and restrictions imposed by multiple authorities at various stages-at the state-, district- and municipal-level-not only prevent rational and uniform pricing strategies for products, but are also the biggest roadblock in creating an all-India market. For Singh it will mean doing away with or amending a number of restrictive laws such as the Essential Commodities Act, 1955; Standard of Weights and Measures Act 1976, and the Agriculture Produce Marketing Act, among others.

3. Allow FDI in retail: According to a PricewaterhouseCoopers study, FDI in retail can generate 8 million jobs in the next five years. Fears of foreign retailers killing mom-n-pop stores are exaggerated, besides which better supply chain management may actually end up helping millions of India's poor farmers get better prices for their products.

2. Amend the Contract Labour Act: If India has to compete with China in manufacturing, it needs more flexibility to open and shut factories without having to worry about labour issues. "To begin with, the Prime Minister can relax the labour laws in the special economic zones," says Ajit Ranade, Chief Economist, Aditya Birla Group.

1. Get on with disinvestment: Disinvesting in non-strategic, non-navratna public sector enterprises through the IPO route (even if strategic sale is ruled out for now) will not only help in deepening and widening the domestic capital market, but it will also release huge amounts of money that can be used for social as well infrastructure projects.

-Ashish Gupta

INSTAN TIP
The fortnight's burning question.

Q. Is Oil on the Boil Again?

No. Madan Sabnavis, Chief Economist, NCDEX

Crude prices have topped at the current levels and from hereon they will slip. These are the general trends witnessed during winter, and with the temperature expected to rise, we will see demand for oil slowing down. For the next three months, I don't expect prices to rise or either fall below $50 (Rs 2,250) per barrel level.

Yes. Suresh Mathur, Group Advisor, Essar Group

Crude oil prices are expected to soften from the current levels, but not to a great extent. This is the peak of winter and it has not been severe, and that is why I think prices will decline from the current levels. However, oil prices may hover between $57 (Rs 2,565) and $60 (Rs 2,700) per barrel, following the narrowing of gap between demand and supply of oil.

Yes. Suresh Nair, Vice President, Kotak Commodity Services

The demand-supply mismatch following the growing economies and the winter demand from developed countries will keep oil prices bullish. The prices are expected to surge to around $65 (Rs 2,925) per barrel in the coming months.

--compiled by Mahesh Nayak

Medium-sized Business, Big Optimism

Guess which part of the world is home to the most optimistic medium-sized businesses? No, it's not the US or China, but India-that too, for the third time in a row. At least that's what Grant Thornton International's, one of the six global accountancy firms, 2006 International Business Owners Survey (IBOS) reveals. Conducted in 30 countries around the world, the survey shows a marked shift in the mood of medium-sized businesses across the world. The most optimistic business owners of all are in India with an optimism/pessimism balance of +93, and in China, surveyed by IBOS for the first time, the confidence score was a balance of +77. "India's business owners continue to thrive and remain very optimistic...the growing reliance on the private sector and trade liberalisation...is proving fruitful for medium-sized enterprises..." Grant Thornton India's Partner & Director, Vishesh Chandiok, said in a release. In contrast, the confidence of business owners in the US regarding the economy has dropped by nearly half (see Mood Shift) from an optimism/pessimism balance of +62 to +32 in one year. But the second-most pessimistic business owners were in Japan.

TRAI's Unified Licensing
It's inevitable in an era of technology convergence.

TRAI's Pradip Baijal: Ringing in convergence talk now

The Telecom Regulatory Authority of India's (TRAI) "Consultation Paper on Issues Relating to Convergence and Competition in Broadcasting and Telecommunications" is only, as the title says, a draft for debate. But the sooner India comes to an agreement on convergence, the better. The world over, such convergence is now standard. In the US, for example, more than 60 per cent of the broadband market is with cable TV operators. Telecom companies (telcos) compete with cable companies in offering telephone services. Cox Communications, for instance, has 2.57 million broadband subscribers and 1.3 million telephone subscribers.

In India, too, it's only a matter of time before communication technologies converge. MTNL for instance, is all set to launch its "triple-play" service, carrying voice, video and data on the same copper telephone line. Some day, technology would allow integration of fixed and mobile services in such a way that a subscriber can use a single phone number to receive calls on a fixed phone (at home or office) and outdoors. TRAI, as the regulator, must ensure that regulations keep pace with technology. Some specific questions that TRAI must answer are: Should there be flexibility in spectrum allocation? (The answer to that will determine the course of communication technology in India, since spectrum, under 3g, can be used for video, besides telephony), should cable operators be allowed to compete with telcos? Should call termination be allowed on customer premise equipment using any protocol recommended by world telecom bodies like the ITU and IETF?

Agreement on convergence regulations will help sort out conflicting rules early on. There's a 20 per cent FDI cap on satellite TV; 49 per cent on cable TV; 74 per cent on IPTV via existing telecom infrastructure; but none on IPTV as such. Indeed, if the new convergent technologies have to succeed, laws must converge too. What's needed now is political will power to push through India's first phase of convergence reforms.

-Kumarkaushalam

IPO Cartel

IPO applicants: Is the name really his?

Ahmedabad-based Roopalben Panchal, who made headlines for trying to corner a large part of the Yes Bank IPO under 6,315 different names but from the same address, depository participant (DP) and bank, may not be the only desperate and devious investor out there. Documents available with BT reveal that many more multiple accounts with one common address have been opened with a host of DPs, other than Karvy Consultants, the DP in the Panchal episode. New DPs where such benami accounts have been detected include HDFC Bank (197 accounts from an Ahmedabad address and 173 from a Ghatkopar address in Mumbai), IL&FS (174), ING Vysya Bank (201 from one address and 373 from another), Motilal Oswal Securities (186), Bank of Rajasthan and UTI Bank (104). For the moment, the DPs are ducking behind loopholes in regulation. "Guidelines permit investors to open multiple accounts," says Motilal Oswal, Chairman of the eponymous firm.

The question, of course, is how did the DPs fail to notice so many accounts with the same address? "We are awaiting a report from depositories (NSDL and CDSL)," says a Sebi source. NSDL has also asked all the DPs to check each and every account to find the real people behind multiple applications. "If any applicant fails to (prove his identity), the account will be frozen immediately," says an NSDL official overseeing the role of DPs in the Yes Bank IPO.

-Anand Adhikari

Retail Will Boom. QED
The sector will grow three-fold over the next four years.

The great Indian retail story: We're still at the beginner's level

Anyone having even a passing acquaintance with the Indian economy knows that retail is one of the sectors that promises to become the next big thing. The reason: organised retail still accounts for barely 3.5 per cent of the total retail pie, giving it a massive upside potential. CRIS Infac, a research outfit, in its outlook for retail in India, estimates that organised retail accounts for sales of only Rs 35,000 crore in a Rs 10,00,000-crore market segment. The outlook for the next few years throws up some interesting figures. According to Nagarajan Narasimhan, CRIS Infac's Head of Research, organised retail will tot up revenues of Rs 1,09,500 crore by 2010, three times the current level. "Excluding land costs, there will be an investment of Rs 15,500 crore in this sector during this period," he projects.

There are both demand and supply factors driving this growth. The development of new and evolving formats, and exponential growth within existing ones are crucial supply side reasons. "From the demand side, demographic changes and the increased availability of cheap finance will drive growth," he thinks.

A look at organised retail in other countries can provide useful pointers. "Brazil and China have 20 per cent penetration levels, each; in Russia, the figure is 14 per cent. The penetration level in India: 3.5 per cent," informs Narasimhan. Given these figures, the projections for the future don't seem that fantastic after all. And if the government finally does allow foreign direct investment (FDI) in the sector, it will probably get there that much earlier.

The fine print of the study is equally bullish. India's retail story is not restricted only to the bigger cities. According to the CRIS Infac report, Tier II cities account for 13 per cent of the country's total retail spend. "Here, there is a significant price differential. There is a 40-50 per cent discount on lease rentals in these cities (10 Tier ii cities have been considered for the study, including Nagpur, Nashik, Kanpur, Lucknow and Kochi) compared to the big cities (the four metros-Delhi, Mumbai, Kolkata, Chennai and the four mini metros-Hyderabad, Bangalore, Ahmedabad and Pune)," he points out. So, the next few years will see some serious action in this segment. That's old hat, really. But now, there are numbers to back the optimism.

-Krishna Gopalan

Realty's Foreign Investors
The Reserve Bank of India may be soft-pedalling FDI in realty, but there's no dearth of investors.

Emaar Properties PJSC, Dubai
Proposed investment: $500 million (Rs 2,250 crore)
Projects: Commercial and residential properties in Delhi, Andhra Pradesh, Karnataka, Tamil Nadu and Maharashtra

IJM Corporation Berhad, Malaysia
Proposed investment: $500 million (Rs 2,250 crore)
Projects: Roads, bridges, and commercial and residential complexes in Andhra Pradesh, Delhi and Jaipur

Lee Kim Tah Holding Group, Singapore
Proposed investment: $115 million (Rs 517.5 crore)
Projects: Building an integrated township in Siruseri IT Park Chennai with 6,000 residential units

Keppel Land, Singapore
Proposed investment: $15-20 million (Rs 67.5-90 crore)
Projects: Residential complexes in Bangalore

FOREIGN VENTURE CAPITAL FUNDS

Ascendas Pte Ltd, Singapore: The $200-million (Rs 900-crore) Ascendas India IT Parks Fund will increase its corpus to $480 million (Rs 2,160 crore) and invest in Indian IT parks

Tishman Speyer, US: Has a $250-million (Rs 1,125-crore) joint venture fund with ICICI Ventures for investment in India

Government of Singapore Investment Corporation: Has invested $10 million (Rs 45 crore) in a township in Chennai

Size of Indian real estate industry in 2005: $12 billion (Rs 54,000 crore)

Estimated Size of Indian real estate industry by 2010: $45-50 billion (Rs 2,02,500-2,25,000 crore)
(Source: Ernst & Young)

-Aanand Adhikari