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MARCH 12, 2006
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Trade Battle
Hots Up

The never ending fight between European Union and the US has taken another twist. The EU has threatened to impose up to $4-billion-worth of sanctions on the US, after the WTO upheld a ruling that the latter failed to end an illegal tax rebate for exporters. Analysts believe that us now has three months to act to avoid the reimposition of retaliatory measures. A look at the flare up.

e-Credit: What Next?
In most developing countries financial service providers are not yet in a position to use modern credit risk management techniques. Many developing economies still need to establish functional credit information systems in order to improve the quality of financial information. Will they?
More Net Specials
Business Today,  February 26, 2006
An Unequal Battle


This is just the third edition of this magazine's annual study on The 25 Most Powerful Women in Indian Business and already the sample from which these women are picked is larger, much larger, than it was three years ago. That's surely reason for celebration for it means that, at least in the more progressive companies in India Inc, women are starting to get their due. To resort to the lingo of pharmaceutical companies, it also means that there is a 'strong pipeline', that enough women are entering organisations at junior levels to allow for a certain number (after the requisite merit-based erosion) to reach the top.

If there is reason to temper these celebrations (and there is), it comes from the backgrounds of the 25 women in the listing. All of them hail from middle, upper-middle, and upper class families. Most were born and brought up in urban India. Several have had the privilege of studying abroad. Still, it has taken these women long enough to break into the ranks of senior management in their respective companies. And still (despite the fact that the sample, as mentioned earlier, is larger this year), there are not enough of them.

What of rural and semi-urban India? Let's start with sex-ratios. According to an article in a recent issue of New York Times Magazine, the sex ratio in Western Europe and North America is around 105 women for every 100 men. For India as a whole, it is 94 women for 100 men and in areas where female foeticide has been more successful than in others, Punjab, for instance, it is lower still, around 87 women for 100 men. Given these ratios, it might be fair to assume that in India fewer girls survive their first year than boys; then, there is a constant process of enforced-attrition-some girls do not go to school at all, others are asked to drop out when they finish middle school or high school, not too many go to college, and the enforced attrition continues.

Are things changing? Sure, in some parts of the country. Are things constant? Sure, in other parts. The number of women in corporate India will certainly increase, but it will be a slow and painful process. And just as the Indian cricket team can be described as having 'arrived' with several of its members hailing from small-towns in the rural hinterland, this magazine's annual listing of women would have arrived when it sports the name of at least one small-town girl who made it big in corporate India.

A Budget For The Other India

A Chidambaram: A New Deal can spread the smile

There is a strange dichotomy about most past Union Budgets and the economic policies of successive governments irrespective of their hue. Most things to do with industry, and, ergo, things that are of interest to urban citizens, are dealt with the way any government that subscribes to the free market ideology should do. "If there is pain, and there will be," industry and urban citizens are told, "you have to endure it because you stand to gain so much more eventually." And that is in the fitness of things. However, when it comes to rural and agricultural concerns, the approach of all Indian governments has been to subsidise, to proffer sops, to enhance government spending on developmental projects, and to generally do the things that increases the disconnect between rural India and economic reality.

This strategy may work in the short-term, but in a country where at least 60 per cent of people depend, directly or indirectly, on agriculture for their livelihood and where things do not appear to be alright with rural India (the fact that large number of people continue to migrate to the cities in search of a better life is proof enough) it will likely not address the issues that need to be addressed if economic growth is to be all encompassing and equitable. No government has had the will to take on land and agricultural reform (there are powerful vested interests at work in both). The Agricultural Produce Marketing Committee Act has been amended only in name, and contract farming remains a distant dream. Rural entrepreneurs have no access to seed capital or venture funding. And archaic laws and narrow economic beliefs have constrained banks from venturing into microfinance, at least not in any kind of scale. For the record, the last rural-minded policy adopted by any government was the Green Revolution and that was in the 1970s.

Compared to what it will take to address these issues, everything governments have done until now in the cause of free market economics, including privatisation and disinvestment, looks easy. Yet, it is something that needs to be done. The dichotomy in the economic policies has already created two Indias; if governments continue along this path, they will succeed in driving a wedge between the two Indias, something that could result in social strife. Will Finance Minister P Chidambaram bite the bullet on February 28?

A New Game

Indian cricket team: Spot some small town boys

This has to be a revolution engendered by television. We're speaking, of course, about the fact referred to in An Unequal Battle, that several members of the Indian cricket team hail from small towns, something that wasn't the case even a few years ago. Broadcasting in India may have taken off after the 1982 Asian Games (in Delhi). Interest in cricket may have first peaked in 1983 when underdogs India thrashed favourites West Indies to take the World Cup (it was then called the Prudential World Cup after the insurance firm that was the sponsor). However, it was the emergence of satellite television, which made it possible for anyone interested in cricket to catch just about all the action happening anywhere in the cricketing world that allowed anyone who wanted to overdose on cricket to do so. Some of those young boys who ate cricket, breathed cricket, and lived cricket decided to play the game. The result is there for all to see.

There is another aspect to this phenomenon as well, one involving economics. There are not too many opportunities open to young men, in terms of fast track careers, in small towns and cities. Cricket promises them a way out, a release from the drudgery of having to settle for a B-grade job, a route to riches. The Indian cricket board (BCCI) has grown immensely rich-it is reported to be the richest cricket board in the world-largely on the strength of sponsorship and telecast deals it has struck with companies and broadcasters. Thanks to this, Indian cricketers are paid very well. The interesting thing is that cricket and cricketers have blossomed in the small towns without any intervention by the Indian cricket board. The money in BCCI's coffers, several people have pointed out, should be used to develop cricket in the Indian hinterland. The board, however, has been loath to do this.

The wide reach of television-at last count there were around 108 million television households in the country; some 60 million of these have access to satellite television-and the healthy economics of being a cricketer would suggest that, if things do not go horribly wrong, India could well have among the best cricket teams in the world shortly. And if the BCCI spends its money wisely (it has just signed a four-year, $600-million-plus or Rs 2,700 crore deal for broadcast rights), it could be even sooner.




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