Daily Excelsior...Business

50 Indian IT firms to take part in Gitex 2004 ....

Rising mobile subscriptions challenge BSNL, MTNL monopoly .....

Govt not to legislate on private sector reservation .....

Inflation dips marginally to 7.80 pc .....

Jobs worth 210 bln to be outsourced to
India in 2005: Study

NEW DELHI, Oct 3: Top 100 global financial companies will offshore jobs worth over 200 billion dollars to India and other countries in 2005, says a new research by deloitte and touche.

"Financial institutions are moving business functions to India because they are recognising compelling cost advantages and they are able to lock in savings and manage risks effectively," Mr Peter Lowes, the US leader of Deloitte’s outsourcing practice, said.

In 2005, Deloitte expects the top 100 global financial companies to offshore a total of 210 billion dollars of their operating costs, saving on average, 700 million dollars.

The survey, covering 43 financial services companies around the world, suggests that the number of firms taking the offshore option increased by 38 per cent last year.

Deloitte also estimated that by 2010, 20 per cent of the operating costs of global financial institutions would be centred abroad, reducing costs by about 37 per cent.

Analyst datamonitor also said earlier this year that outsourced, offshore call centre positions will more than double by 2007 to 241,000, from close to 110,000 at the end of last year.

However, the Deloitte survey said most of the companies sending jobs to India and other countries had concerns about risk management. Half of those surveyed had contingency plans if the offshore operation went wrong.

"Risks related to Government change and policy changes are prompting companies to have a multiple-country strategy, which makes it easy for them to migrate services if there is a problem in any operation," Mr Lowes said.

Apart from India, other countries with high proficiency in English are emerging as popular destinations, including Malaysia and the Philippines, the report added. (UNI)

Call rate to stay easy Govt bonds seen range-bound

MUMBAI, Oct 3: Government bond prices are expected to stay range-bound during the week with bargain buying at lower levels arresting the sharp fall started in the previous week, dealers said.

The easing domestic inflation to 7.80 per cent from 7.87 per cent, would also boost the sentiment, even as players will keenly watch the movements in crude oil prices.

However, any major recovery is still unlikely in the bond markets as the sentiment remained weak amid fears of an interest rate hike with the inflation still sticking near 8 per cent level, sharply up from 4.32 per cent in late April, dealers said.

Oil prices also remained firm just below record highs amid concern over possible conflict in nigeria’s oil-producing delta region, where a two-day truce between rebel militia and Government forces is holding.

US light crude was at 49.82 a barrel on Friday, within a dollar of the all-time peak of 50.47 hit earlier in the week. London brent crude was 2 cents up, at 46.40 a barrel.

The interbank call rate is expected to be easy at sub-repo level during the week on comfortable liquidity.

During the week just ended, call rate witnessed volatile movements, with the intervening holidays creating some Mismatch in demand and supply.

Call money market remained closed on Thursday due to the half-yearly bank account closing and Saturday on account of ‘Gandhi Jayanti’ holiday, resulting hectic activity on reporting Friday.

Call rate touched a high of 4.75-5.00 per cent and hit a low of 1-1.50 per cent in intra day deals on Friday, before closing the week steady at 4.25-4.50 per cent.

Government bond prices sank deeper into red during the week on persistent selling pressure, amid concerns of rising oil prices and interest rate.

The marginal drop in inflation and the retreat in oil prices from record highs also failed to cheer the market as bond prices continued their falls with players fearing of an interest rate hike, unwound positions.

The 10-year yield on the 7.37 per cent, 2014, bond closed the week at 6.38 per cent, 42 basis points higher than previous week’s close of 5.94 per cent. (UNI)

India’s paper industry lagging behind in eco-friendliness

NEW DELHI, Oct 3: The country’s paper and pulp industry is improving its environmental performance but still complies poorly with global environmental practices, according to a new study by Centre for Science and Environment.

The environmental watchdog in its green rating project has upped the industry’s environmental score to 29.1 per cent in 2004, from 27.4 per cent in 1999, but said the industry used vast quantities of water and chlorine and employed obsolete technology, producing high levels of pollution in the form of solid waste and lime sludge compared to global trends.

It said the industry consumed 135 cubic metres of water per unit of raw material, compared to 70 cubic metres in Canada and 47 cubic metres in EU. Though the figure had substantially improved from 200 cubic metres in 1999, when CSE first rated the industry, water consumption could be reduced further. It was possible for mills to close their water cycle and reuse water to become ‘zero-discharge’ mills, CSE said.

The Indian paper and pulp industry also used a high percentage of bleach in manufacturing that emerged as toxins in wastewater and sludge discharge. "The sector has to think in terms of technology leapfrog to eliminate the use of toxic chemicals like chlorine," the study said.

Most Indian mills use the highly polluting elemental chlorine for pulp bleaching, as it is the cheapest way. But processes using elemental chlorine require five to ten times more water than the contemporary elemental chlorine free and total chlorine free technology.

During 1998-2002, the average water consumption in bleach plants of Indian mills was about 60 tonnes per tonne bleached pulp produced, about 12 times higher than the global best practice which uses non-chlorine technology.

The industry also relied heavily on wood and bamboo as raw material, utilising only 20 per cent of the wastepaper generated in the country. The study said the industry could benefit from networking with rag-pickers to improve its score as also focus on sourcing raw material from farmers to generate employment.

Of the 30 mills evaluated under the green ratings project, the biggest loser was Indian Andhra Pradesh Paper Mills Ltd (APPML) dropping to the 11th position from the second in 1999.

CSE said the mill was a voracious consumer of water due to its obsolete technology and consumed a whopping 200 tonnes of water for every tonne of paper produced, more than five times the global best practice. Its performance was also lower than the industry’s average in terms of chemicals consumed for pulping and use of elemental chlorine.

Another major loser was Ballarpur Industries Limited (BILT), that slipped to the 13th position as it generated 575 kg lime sludge per tonne of unbleached pulp produced. The mill also lost out on its water consumption and farm forestry initiatives.

The third major loser was Hindustan Paper Corporation Nangaon, which slipped to the 20th spot from the 10th due to a very slow pace of reforms.

ITC Ltd’s Bhadrachalam unit was adjudged the greenest unit by the green ratings project as it became the first plant in the sector to eliminate the use of chlorine that is used to impart brightness to paper. With the elimination, itc could now make food grade paper, CSE said.

JK Paper Mills’ Rayagada unit bagged the second position due to its efficient resource management, followed by BILT graphics of Bhigwan (Maharashtra).

CSE said the plant used state-of-the-art technology, generating little pollution. The unit treated wastewater effectively, which was then used by local farmers for irrigation.

It said though the industry had a long way to go, there were visible improvements in environmental performance of large companies. Of the companies rated, 16 had environmental policies, compared to just one in 1999 and 25 had environmental departments.

The average water consumption had also come down from 200 tonnes of water per tonne of paper to 135 tonnes and elemental chlorine consumption from 65 tonnes to 40 tonnes by 2002.

Besides, the area brought under farmland for tree cultivation had doubled from 20,000 hectares to over 40,000 hectares by 2002.

However, there was a lot of scope for improvement.

"The top companies have only qualified for the three leaves award, while the highest in the sector is five leaves. The overall analysis shows that while the sector improved in some areas, it lost out in certain areas such as process efficiency and management. Also the improvements made in raw material souring and water use need to go further," CSE said. (UNI)

India fares poorly in provision of economic security: ILO

NEW DELHI, Oct 3: The International Labour Organisation (ILO) has complimented India for maintaining high growth in the era of intense globalisation during the past two decades, but has commented poorly on its record of economic and social security for its poor.

Although the great majority of countries had lower growth in 1980 and 2000 than in 1960-80, China and India are notable exceptions, the ILO says in its just released report ‘economic security for a better world’.

Statistics provided in the report shows that there has been a downward trend in the rate of economic growth of developing countries after 1980 and an increase in the volatility of growth.

The average annual growth rate of world output declined from 4.6 per cent to 2.8 per cent in these two periods. In the first, world output grew 2.5-fold in the second only 1.7-fold.

For G-7 countries, the slowdown was marked from 5.1 per cent to 2.4 per cent a year. Even in the United States - inspite of the prosperity of the Clinton years - the average growth rate in the second period (3.2 per cent) was below that of the first (3.5 per cent).

And despite China and India’s size in remarkable growth, the overall rate of growth in the 59 developing countries fell from 5.5 per cent to 4.5 per cent annually. If China and India are excluded, the declined was even more pronounced, from 5.8 per cent to 3.7 per cent, the report says.

India, however, has not done well in terms of provision of economic security to its citizens. It ranks 74th out of 90 countries in terms of economic security index constructed by the ilo team of experts for the report.

Economic security has been measured by combining normalised values of seven socio-economic security indices — income, work, representation, job, employment protection, labour market and skill security — to yield a composite measure.

On provision of income security, India ranks 94th out of 96 countries.

In contrast, Pakistan is ranked 81, Bangladesh 79 while Sri Lanka is ranked 56.

The only two countries which have performed worse than India in terms of income security are Congo and Sierra Leone.

All forms of security are needed to do better. Countries, therefore, need to adopt a policy coherent approach. The two most important determinants of other forms of security are income security and representation security, Mr Guy standing, Director ILO Socio-Economic Programme, says.

The report says globalisation has not been associated with a dramatic increase in economic growth, as its advocates claim it would, and indeed has been associated with the slowing of growth in many countries. The exceptions, however, are China and India.

More crucially, globalisation has been associated with greater incidence of economic crisis. There has been rapid and relatively unanalysed growth in private regulation of economic activity and policy.

The report says the extent of poverty has been under stated, particularly in Africa. The number of working poor has grown in industrialised countries during the last two decades. Wealth inequality is greater than income inequality, but income inequality has grown. One form of inequality that has worsened is the functional distribution of income, with the share of national income going to labour shrinking.

The report says income insecurity for the unemployed has also intensified in many countries, with a growing majority not receiving support from their Governments. Even in industrialised countries, only a minority receive unemployment benefits or adequate income support from their Governments.

It paints a dismal picture for the vast majority of people in developing and transition countries. This population is anxious and pessimistic about the future income security, particularly in old age. (UNI)

Income insecurity dogs workers the world over

NEW DELHI, Oct 3: Majority of workers around the world suffer from income insecurity.

Drawing on detialed household and workplace surveys covering over 48,000 workers and over 10,000 firms, a new ILO report shows that many forms of income insecurity are not identified in standard income measures.

These include irregularity of payments, non-payment of contractual wages a tendency in many countries to put large number of workers on "unpaid leave" and systematic patterns of deductions from earned income, and Government policies that are supposed to reach the poor but do not do so.

The report on socio-economic security programme states that functional income distribution has worsened around the world, with larger shares of national income going to the owners of capital and smaller shares going to labour.

"This is particularly striking in countries such as India and Mexico" the report titled "economic security for a better world" says.

Referring to subsidies, it points out that they have become enormous and have tended to go to corporations and the relatively wealthy, while subsidies for the poor have tended to decline.

Middle income groups tend to have a similar share of national income across the world, while national differences in income inequality primarily reflect differences in the shares received by the very rich and the very poor, the report states.

The survey finds that social security schemes and fiscal policy have become more regressive with many groups of workers losing benefits or failing to obtain them.

"State social security benefits and social services have tended to become both more restrictive and of lower value, lessening the promise of enhanced income security," the report says.

It also finds that old-age income security has been worsening, particularly for those old people dependent on the state.

In countries for which the ILO has data, the average age for entitlement to a state pension has risen by about half a year for men and by about one year for women in the past decade.

In both rich and developing countries, healthcare costs have been rising as a share of disposable income.

In the ILO’s people’s security surveys in developing and ‘transition’ countries, more people expressed fear that they did not have enough to pay for healthcare than for anything else. (PTI)

50 Indian IT firms to take part in Gitex 2004

DUBAI, Oct 3: A record number of 50 Indian IT companies will take part in the Gulf Information Technology exhibition (Gitex) 2004 beginning today with some of them providing Arabic enabled software and Arabic support services to capture the major chunk of the market in the Gulf and north Africa, a top Indian official has said.

The participation of 50 Indian companies, lead by Electronic and Computer Software Export Promotion Council (ESC), is one of the largest ever participation by the Indian companies in any it event worldwide, Consul General Yash Singh told reporters at the Indian consulate here yesterday.

In terms of area, the India pavilion has recorded a robust growth of more than 20 per cent over the last year, said Kamal Vachani, Regional Director of ESC for the UAE and Middle East.

Gitex 2004, the Middle East’s Premier Information Technology show at the Dubai World Trade Centre, will host a record number of over 2,428 companies.

Also, Gitex computer shopper, the single largest it retail platform in the Middle East, also opens with approximately 140 exhibitors representing over 500 companies.

With an expected visitor turnout of 80,000, the transaction levels at Gitex computer shopper is expected to surpass the Rs 50 crore, achieved last year.

The 50 Indian companies that are taking part in the Gitex have already begun their move to take over the Gulf market, ESC additional Executive Director D P Gupta and consul General Yash Singh said.

"We have already made a beginning with some of the 50 Indian companies attending the Gitex already offering Arabic enabled software services," he said.

One such firm is Quark India that will launch its Xpress 6.1 me, developed specially for the Arabic markets.

Yash Singh pointed out that Indian IT giants such as Infosys was working in the banking sector in the Gulf, Tata consultancy services offering services to the higher institute of technology in Abu Dhabi and Wipro in e-governance solutions for the Dubai municipality.

India’s move to tap the buoyant Gulf market came after September 11 bombing of New York, when Indian IT companies realised the need to seek greener pastures beyond the US shores, the Indian officials said. (PTI)

Rising mobile subscriptions challenge BSNL, MTNL monopoly

NEW DELHI, Oct 3: The monopoly of BSNL and MTNL over telecom services is in for another jolt as cellular connections, with benefits of mobility and lower tariffs, will overtake fixed line subscriptions in October-December 2004, credit rating agency ICRA has said.

While fixed network subscriptions in India increased only 4.6 per cent to 43.29 million in the first quarter of this fiscal, cellular phone users grew a whopping 118 per cent from 17.3 million in April-June 2003 to 37.73 million in the same period this year, the telecom performance review by ICRA said.

"Cellular mobile telecommunications are likely to play an increasingly important role in providing universal service at a lower cost than fixed line service," ICRA said.

Moreover, while fixed line network will expand from 42.8 million lines at the end of 2003-04 to 45 million by the end of next fiscal, the rate of revenue growth will be lower in the face of competition from cell phones and expected decline in prices of NLD and ILD services, it said.

"Cellular services have the maximum potential in diluting BSNL and MTNL’s traditional monopoly control over the telecommunications services," ICRA added.

The Government is already working towards the proposed merger of BSNL and MTNL for synergising operations of the public sector telecom giants.

Fixed line density was 3.96 per 100 at the end of this fiscal’s first quarter, as compared with 3.94 at end-FY2004 and 3.88 at end of fiscal 2003, ICRA said.

However, cellular services density, including GSM and CDMA, is rising at a faster rate. From 1.22 at the end of FY2003, it rose to 3.1 at the end of fiscal 2003-04 and was 3.46 at the end of April-June 2004.

Further, cellphones accounted for 94 per cent of new telephone connections in FY2004 as compared with 69 per cent during fy2003 and 33 per cent in fiscal 2001-02.

For users, cellular connections offer advantages of mobility and better service quality. But the implementation of unified licensing regime is expected to result in increased competition for existing GSM-based cellular operators from DDMA services, ICRA said.

Greater competition will result in lower tariffs, which will stimulate demand. It will lower costs due to economies of scale, but lower the Average Revenue Per Unit (ARPU) as more low-end consumers opt for mobiles.

As a result, weaker operators would be forced to form alliances or divest equity in favour of stronger players. The possibility of lower revenue growth, lower profitability and continuing accumulated losses could inhibit the flow of large long-term investments into the telecom industry, ICRA added. (UNI)

Govt not to legislate on private sector reservation

NEW DELHI, Oct 3: The UPA Government does not propose to bring a legislation to ensure job reservation in the private sector.

"At present there in no plan to bring forth legislation on the job reservation issue, instead we are more keen to have a comprehensive dialogue with the industrialists to arrive at an amicable solution, which would protect the rights of the backward classes," Minister for Social Justice and Empowerement Meira Kumar told UNI on the sidelines of a panel discussion on job reservation in private sector.

Ms Kumar is a member of the Group of Ministers (GoM) constituted by Prime Minister Manmohan Singh to examine the feasibility of job reservations in the private sector.

The group headed by Agriculture Minister Sharad Pawar, includes Finance Minister P Chidambaram, Commerce Minister Kamal Nath, Communications and IT Minister Dayanidhi Maran, Railway Minister Lalu Prasad and Chemicals and Fertilisers Minister Ram Vilas Paswan.

The GOM is scheduled to meet industry representatives formally after the Maharashtra state elections.

"As Mr Pawar is busy with the elections, the GoM will initiate a formal dialogue with the industry representatives after the polls," she said.

The minister also said that she has been informally meeting industry representatives. "I’am positive and hopeful about the outcome," she said.

The GoM’s terms of reference include initiating a dialogue with the industry to ensure the best way the private sector can fulfil the aspirations of Scheduled Castes and Tribes.

Meanwhile, FICCI secretary general Amit Mitra, who was also present at the discussion, welcomed the Government’s decision not to legislate on private sector reservation saying that the industry was not opposed to affirmative action to ameliorate the condition of the backward castes.

He, however, wished the Government would take the viewpoint of the industry into account before finalising its policy on reservation in the private sector.

The industry by and large has opposed tooth and nail Government’s move to set reservations in the private sector on the grounds that competition is a buzzword in the era of globalisation.

A section of the industry, however, feels that the Government should effect reservation only by providing a level playing field to the industry by way of tax sops and other incentives.

The broad principles of the private sector reservation for Backward Castes has been enunciated in the National Common Minimum Programme, which calls for a dialogue with the industry on the issue. (UNI)

Inflation dips marginally to 7.80 pc

NEW DELHI, Oct 3: Lower prices of poultry chicken, fruits, vegetables and imported edible oil brought down the annual rate of inflation by 0.07 per cent to 7.80 per cent for the week ended September 18 from 7.87 per cent in the previous week.

The annual inflation rate, calculated on point to point, basis was sharply lower at 5.02 per cent during the corresponding week of the previous year.

The Government has introduced a number of measures to tame the spiralling price rise and contain inflation that breached the 8 per cent barrier a few weeks ago. The Reserve Bank of India announced a net 0.5 per cent increase in the cash reserve ratio to mop up excess liquidity in the economy.

The Wholesale Price Index (WPI) for all commodities for the week ended July 24 has been revised upward to to 186.9 as against 186.2, while the inflation rate was firmed upto 7.91 per cent from 7.51 per cent for the period.

While the indices for fuel, power, light and lubricants (14.23 per cent weight) remained intact at the previous week’s level of 281.6, the index for primary articles (22.02 per cent weight) that comprises mass-consumption products, declined by 0.6 per cent to 192.7 from 193.9 for the previous week.

The index for manufactured products, which has the highest weightage of 63.75 per cent, increased by 0.4 per cent ot 167.6 from 167.0 points for the previous week due to increased prices of food products.

In the primary articles’ category, the index for food articles declined by 0.7 per cent to 188.9 from 190.3 due lower prices of lower prices of poultry chicken, fruits, vegetables, coffee, jowar, urad, wheat, tea and ragi.

The index for non-food articles group dipped by 0.5 per cent to 195.8 as raw rubber prices declined by 5 per cent, hidestraw prices by 3 per cent and soybean and raw cotton by 2 per cent each. However, the prices of castor seed, (2 per cent) and niger seed, raw jute and groundnut seed (1 per cent each) moved up.

In the manufactured products category, index for food products group registered a 1.5 per cent jump despite lower prices of imported edible oil, rice bran oil and gur as unblended black tea leaf prices surged 18 per cent, oil cakes 4 per cent, skimmed milk powder 3 per cent, butter, solvent extracted groundnut oil, gingelly and salt 2 per cent each and canned fish and ghee a percentage point each.

Six per cet decline in prices of cotton knitted garments and 5 per cent decline in prices of synthetic yarn resulted in a 0.4 per cent decline in the index for textiles 138.2 points from 138.8 for the previous week.

The index for chemical and chemical products group rose marginally to 205.0 from 205.1 as phenol and purified terephthalic acid prices moved up.

Lower prices of zinc ignots (5 per cent), other iron steel (4 per cent), ms bars and rounds (2 per cent) and zinc (1 per cent) led to a slight dip in basic metals alloys and metal products group index, even as prices os zinc ignots increased by 3 per cent.

Machinery and machine tools group index rose by a percentage point to 139.3 in the week ended September 18 in the wake of higher prices of complete engines and fluorescent tubes. However, prices of roller bearings and powerlooms automatic in the group dipped by 2 per cent and 1 per cent, respectively.

The index for transport equipment and parts group rose by 0.4 per cent to 154.4 from 153.8 points as mopeds’ cost was up 6 per cent during the week. (UNI)