In the 15 months running up to the 14th general elections, five Indian states will go the polls-not the most conducive climate for hard-nosed economic reforms. So, when Arvind Virmani, the CEO of Indian Council for Research on International Economic Relations, a policy think-tank accuses the "compulsions of impending electoral politics" of stopping much-needed economic reforms in their tracks "nine months ago", it is a charge that is as condonable as it is true. No political party anywhere in the world will risk thrusting unpalatable laws down the throat of the electorate this close to the polls. What's worrying is that the few reforms the government has gone ahead with have come a cropper: poorly drafted legislations have killed some; and inter-ministerial wrangling, some others.

Conditional Access System (CAS), a panacea for all ills that ail the satellite broadcast industry-arbitrary tariffs, under-reporting of subscribers by cable operators, and little choice for the consumer-is a case in point. The July 16 deadline for the implementation of CAS is just around the corner, but issues such as the pricing of pay channels and the number of free-to-air channels that will form the basic bouquet remain unresolved. As this magazine goes to press broadcasters can look forward to losing subscribers-who's going to pay around Rs 3,000 for a set-top box?-and advertising revenue; large cable operators are scrambling to raise the money to provide 6.5 million set-top boxes to television homes in the four metros; and the consumer is griping about having to pay more to catch up on popular soaps and cricket. And all because the government doesn't seem to have realised what it was getting into when it passed the Cable TV Regulation (Amendment) Bill 2002 on December 10 last year.

Then, there's the Civil Aviation Ministry's efforts to privatise ground-handling operations across nine airports that has run afoul the Home Ministry's security paranoia. That's left Cambatta Aviation and Dnata in the lurch: the two companies had been issued letters of intent by the Airports Authority of India to go ahead and launch ground-handling services.

Even the public face of the government's pro-reforms lobby, Telecom, it, and Disinvestment Minister Arun Shourie isn't above reproach. In April, he, along with then Civil Aviation Minister Shahnawaz Hussain and Petroleum Minister Ram Naik opposed an increase in their respective sectoral Foreign Direct Investment ceilings citing "security concerns". "Security issues have nothing to do with the proportion of equity in any sector," scoffs Virmani. "If you are worried about security have a separate security law."

The most provoking display of the government's bungling came from l'affaire vat. The contentious Value Added Tax regime was supposed to start on April 1 this year but on April 24, Finance Minister Jaswant Singh told parliament, "a poorly implemented vat won't work-vat can't be implemented unless all states adopt it altogether". Goodbye vat.

One reason for the procedural snafus could be the lack of a clear signal emanating from the central leadership: for instance, is the NDA for labour reforms or not? No one, we daresay not even the Labour Minister, really knows. Another reason, say government-watchers, is simple lack of preparation, frequent reshuffles of ministerial portfolios, and as frequent changes in the finance ministry, the hub of all economic policy-making. Politics is one thing; bad governance, another.

-Ashish Gupta

SATELLITE TV
DTH Daze

Is direct-to-home (DTH) satellite television finally here? It looks like it is: the Subhash Chandra promoted ASC Enterprises claims its service (positioned as an alternative to CAS) will roll out on August 15-difficult, since it hasn't paid its Rs 10 crore entry fee or applied for a frequency clearance. Star TV, through its employee-promoted Space TV, hopes to launch its service by year-end, although there is some controversy over its adherence to foreign investment guidelines. Essel-Shyam, with like IL&Fs and VSNL is hoping that its neutrality (the Chandra family is an investor; none of its representatives sits on the board) will make it attractive to broadcasters. And Doordarshan has vaguely articulated its desire to launch "free DTH". Wait and watch.

-Vandana Gombar

The Xing Thing
Hyundai is trying to hawk the new Santro Xing as Dodge in Europe.

Hyundai Xing: Quelle moniere a la station-service?

If Hyundai Motor India has its way, the sun may never set on its "Sunshine car", Santro Xing. Launched on May 22, Xing will be shipped to Latin America and Western Europe. What's interesting is that the mighty Daimler-Chrysler, which owns a 10 per cent equity in Hyundai Motor, Korea, may lend its name to Xings sold in some European countries. Says B.V.R. Subbu, President, Hyundai Motor India: "India is the largest market for Santro and the economies-of-scale lie here. Hence, we will manufacture Santro Xing only in India and export it to various countries."

The size of the small car (A-segment) market in Europe stood at around 9 lakh units per annum in 2002. The market for small cars, which has been flat for the last few years at around 1 million units, actually dipped in 2002.

The market is dominated by models such as Renault Twingo, Ford KA, Daewoo Matiz, MCC Smart, and Fiat Panda. Hyundai has a paltry 4.8 per cent marketshare in this segment in Europe, the market leader being Renault Twingo (15 per cent).

This calendar year, the company plans to export 30,000 Xings to Latin America and Western Europe. And for 2004, the export target for the car has been set at 70,000 units.

Last year, Hyundai sold around 102,800 cars of which only 8,200-or-so cars were exported. By next year, the Korean car-maker would have also expanded its capacity from 1.5 lakh cars a year to 2.5 lakh cars.

With Tata Engineering's Indica also slated to hit the European market (courtesy, an alliance with mg Rover) in a big way starting next year, the day of the Indian small car may finally be here. Indian, Korean-but-made-in-India, it's all the same.

-Swati Prasad

NICHE
Opto Who?

V. Ramnani: High on opto

Only two companies in the world make the IV fluid and blood warmer of the kind used by allied soldiers in the recent Iraq war. One company is in the US. Guess where the other, Opto Circuits, is? Electronics City, Bangalore, India. Surprised? Here's more. Opto Circuits is also one of the only two FAA-approved companies that make sensors for baggage scanners. Ten years old, the Rs 70-crore company was founded by three NRI partners, and has been making a string of acquisitions (including that of HLL's digital thermometer business) to grow. And that, says its MD Vinod Ramnani, is helping. Indeed. Only last year, Opto's topline was Rs 38 crore. It's warming up.

-Venkatesha Babu

EXECUTIVE TRACKING
Nikhil Nehru Resurfaces

N. Nehru: Starting anew

Last year Nikhil Nehru, once considered a shoo-in for the top job at McCann Erickson quit. Now, seven months later, the ardent philatelist has resurfaced with In Communications, an agency he has co-promoted with former colleagues Indraneel Chatterjee and Charu Bakshi. And so, at 54, with three clients in the bag and some four-to-five more in the mail, and with visions of a Rs 15-crore billing for Year 1, the man who considers youth ''a state of mind fuelled by positive attitude and stamina," starts all over again.

P.S: Watch this space for another resurfacing, this of former Zee head honcho Sandeep Goyal who is reported to be holding talks with Japanese ad major Dentsu to set up a 100 per cent subsidiary in India.

Albert Almeida: Moving on

Tube Travels

There's a buzz of activity on the sales and marketing front at television channels. SET has just hired JWT's Albert Almeida as Senior Vice President (Marketing); MTV has hired Abraham Thomas from set as Vice President (Sales); ESPN has signed on Vijay Koshy from Channel V as Associate Director (Sales-South & West); and Kanta Advani, the former head of sales at Zee moves to SAB TV as President after a transitory four-month long stint at advertising agency Percept D'Mark. We don't know about you, but our head is reeling from keeping track of all those movements.

-Moinak Mitra