Saturday, November 26, 2011
Business
Big bang: Consumers, farmers and SMEs to benefit from the move
FDI in retail to create 10 m jobs: Sharma
NEW DELHI: Commerce Min-
ister Anand Sharma, on Fri-
day, said the government’s
decision to allow foreign
players in the retail sector
will create up to 10 million
jobs in the next three years,
give better prices to farmers
and have a multiplier effect
on the economy.
“The step which we have tak-
en is an investment in the pres-
ent and the future of this coun-
try,” Sharma told reporters
here. “It will be a fillip to job
creation in the manufacturing
sector,” he said.
Foreign companies investing
more than 51 per cent in sin-
gle-brand retail stores must
source at least a third of their
products from small domestic
industries or village craftsmen,
a government release said
quoting the Commerce Minis-
ter said.
He also said under the new
FDI policy stores will have to
sell fresh agricultural produce
as unbranded products. “FDI
policy has been evolved after
consulting all stakeholders,” he
added.
Political backdrop
The boldest reform measure
taken by the government of the
day was opposed by UPA’s
largest ally Trinamool Con-
gress besides opposition BJP
and Left parties. On Friday
too, the members of Parlia-
ment forced the adjournment
of both Houses on the issue of
allowing foreign retailers in
the country. The government DH News Service
Business bytes
No plans to list PSU
general insurance cos
»
The government, on Fri-
day, said there is no plan
to list public sector general in-
surance companies on the
stock exchanges, with Minis-
ter of State for Finance Namo
Narain Meena reiterating so
in a written reply to a question
in the Lok Sabha.
At present, there are four
state-owned non-life entities
in the country namely, New
India Assurance, Oriental In-
surance, United India Insur-
ance and National Insurance.
Replying to another question,
Shriram eases deal processing
»
Shriram Equipment Fi-
nance Company (SEFC),
a wholly owned subsidiary of
Shriram Transport Finance,
announced, on Friday, that
the company has simplified its
deal processing system, aided
with cutting edge technology
support, to provide shortest
turn-around time in the indus-
try. It can conclude finance
and due-diligence aspects of
deal in half the average indus-
Irda’s new norms for agents
»
Irda has come out with
guidelines for persistency
ratio under which it would be
mandatory for corporate
agents to retain 50 per cent of
their clients. The guidelines
‘BPOs offer exciting careers’ Ruukki Metals eyes
Shayan Ghosh
BANGALORE: The IT indus-
try body Nasscom has re-
cently introduced a detailed
career guide for the BPO
(business process outsourc-
ing) industry to tell young
job aspirants that the BPO
jobs are exciting and they
offer good career options.
Being IT enabled, most work
can now be done from any lo-
cation allowing businesses to
access right skills at the right
costs globally.
The guide, titled ‘Building a
Career in the BPO Industry’ fo-
cuses on the opportunities the
sector provides to aspirants
and how they can consider it
as serious career option. “Ca-
reer growth in the BPO indus-
try is based on meritocracy, i.e.
on your performance. Promo-
tions, enhancement of skills
(leadership and domain) and a
plethora of opportunities are
available to you if you choose
to be a part of this industry,”
said Nasscom President Som
Mittal in his foreword.
Stressing on how the indus-
try has helped create employ-
has argued that attracting for-
eign investment in retail infra-
structure will tame inflation
and reduce waste in a country
where close to 50 per cent of
fruits and vegetables perish be-
fore reaching consumers.
Inefficient supply chain
Lack of investment in the lo-
gistics of retail chain has creat-
ed inefficiencies in the food
supply chain. Though India is
the second largest producer of
fruits and vegetables (about
200 mt), it has a very limited
integrated cold-chain infra-
structure, with only 5386
stand-alone cold storages, hav-
ing a total capacity of 23.6 mil-
lion mt, 80 per cent of this is
used only for potatoes.
Opening of foreign retail is
also expected to give better
procurement prices to farmers.
At present, there is a complex
chain of procurement involving
several middlemen.
“FDI in retail will create the
enabling environment and it is
expected that progressive
states will undertake gradual
reform of APMC Act which will
ensure direct procurement, at
least of horticultural produce
from farmers to enable them
secure remunerative price,”
Sharma said.
Large investments in the re-
tail sector will also see gainful
employment opportunities in
agro-processing, sorting, mar-
keting, logistic management
and the front-end retail busi-
ness, the Commerce Minister
said.
Meena said the current policy
of the government on banking
sector consolidation leaves the
initiative for consolidation to
the management of respective
lenders. With respect to an-
other question in the House,
Meena said the State Bank of
India (SBI) has reported that
select ATMs in various centres
are enabled for visually chal-
lenged people. The bank has
further reported that a sepa-
rate ‘Drishti’ card has been is-
sued to its visually challenged
customers.
try time, it claimed. Meeting
reporters at the Excon 2011,
the company said its assets un-
der management is in excess
of Rs 37,000 crore. SEFC
provides finance to contrac-
tors, sub-contractors, mine
owners and operators, plant
hirers and others involved in
the development of infrastruc-
ture sector such as road, irri-
gation contractors, mining
owners and operators.
would be effective from July 1,
2014. Extending the guide-
lines to the corporate agents,
Irda said that the norms are
applicable for those who solic-
it life insurance business.
ment opportunities, the guide
informs that in 2009, the in-
dustry employed about a mil-
lion people, approximately 60
per cent from Tier 2 and Tier
3 cities, 45 per cent were
women and 70 per cent less
than 30-year olds.
Dispelling myths
Nasscom hopes to drive away
popular myths prevalent in the
sector regarding the impact of
a BPO job on health and social
life and also security issues for
workers. It is totally incorrect
to say that BPO employees face
health issues associated with
work shift, like sleep disorders,
eyesight problems, depression
and weight-related concerns,
it said.
“The work hours will vary
according to which part of the
business you are in and the lo-
cation of your client,” it said.
The guide explains that out-
sourcing services of the BPOs
are generally used by three
types of companies. Multina-
tional BPO, which is interna-
tional corporation which deliv-
ers services to and from more
than one country. Captive DH News Service
A shopper looks for products at a More Hypermarket outlet in Bangalore. DH PHOTO BY S K DINESH
Move to help growth: RBI
MUMBAI, DHNS: The RBI
Governor D Subbarao, on Fri-
day, said the government's
move to open up the retail sec-
tor will boost growth and con-
trol inflation.
In a speech in Chandigarh,
he said, “It’s commendable as
the government has taken the
initiative. Let's hope that it will
improve the logistics chain and
supply chain management in
agriculture.” On Thursday, the
Union cabinet approved 51 per
cent foreign direct investment
in the supermarket sector. In a
related context, the RBI chief
Another beauty
Actress Nidhi Subbaiah with Bharti Airtel Karnataka circle CEO Rohit Malhotra
launching the new Apple iPhone 4S in Bangalore on Friday. The iPhone 4S 16
GB, which comes with iOS 5 operating system, is priced at Rs 44,500.
Indian IT cos pay lowest salary: Report
NEW DELHI, PTI: India Inc is
among the world's lowest pay-
ing employers in the IT space,
with their mid-to- senior level
staff getting an average salary
of US$36,120 (about Rs 18.5
lakh) per annum -- less than
one-fourth of the IT pay pack-
age at globally top-paying Swiss
companies. The IT sector
salaries are highest in the world
Units are MNC-owned units
that undertake work for their
global operations & organisa-
tion and Integrated Organisa-
tions is an MNC working in
BPO, IT & Software Services,
Engineering, Product and Plat-
form and Consulting.
The guide also tells that in
the last 10 years, many young
people in India have built great
careers in the BPO industry
soon after completing college.
A candidate go through an in-
tensive training process, is
measured on the deliverables
and is rewarded on the basis of
performance. Salary raises,
promotions and incentives are
directly linked to performance,
the guide adds.
Pointing out the growth op-
portunities in the sector, Nass-
com mentions that the sector
employed 1,55,000 employees
in 2002 which has now leaped
to 9,85,000 employees in
2010. The revenues of the in-
dustry stood at $13.6 billion in
2008-09, however, the BPO in-
dustry will nearly be worth $65
billion in 2020, estimated
Nasscom.
said inflation needs to be
brought down to five per cent
initially and then even lower,
consistent with India’s integra-
tion with global economy. The
current inflation situation, ac-
cording to Subbarao, is a con-
sequence of both supply shocks
and demand pressures.
“Raising agricultural pro-
duction and productivity is, im-
portant for containing price
pressures, raising rural in-
comes and making growth
more inclusive,” Subbarao said.
Maintaining that the India
growth story is “credible”, Sub-
in Switzerland at an average of
US$167,890 per annum, as per
a study titled ‘World wide IT
Salary 2011’ by
MyHiringClub.com. It found
that India is ranked seventh on
a list of the 10 worst IT paymas-
ters globally. On the other
hand, Switzerland stands at the
top spot among the top. The
study took into account the av-
automotive sector
Umesh M Avvannavar
BANGALORE: Finland-based
Ruukki Metals, manufacturer
of special steel, is looking at In- tomers and provide them with
dian original equipment man-
ufacturers (OEM) in the auto-
motive segment to market its
special steel and components.
The company is currently
looking at consolidating its
presence in the Indian con-
struction equipment market.
The company, which has
clocked a turnover of Euro 2.4
billion in 2010, has opened an
office in Mumbai to aggressive-
ly sell its products.
“We are presently selling our
special grade steel to over 100
companies in the construction
equipment segment in India.
We are now in talks with Tata
Motors for supply of special
steel to make passenger cars,”
Jouni Rattya, vice president,
Ruukki Metals said.
The company has already
launched special grade steel,
which is used to manufacture
a wide range of construction
equipment in India.
barao pointed out: “For a world
that once believed that an ele-
phant does not have any animal
spirit, our march up the high
growth trajectory proved that
an elephant too can dance.”
Subbarao maintained that
there is a need to invest in rural
infrastructure and the supply
chain to build forward and
backward linkages. “We also
need to be mindful that land
and water costs will only in-
crease over time; and inclusive
growth will push up wages
thereby putting upward pres-
sure on inflation.”
erage salaries for people with
six and more years of experi-
ence for the Indian and other
companies. The report studied
more than 6,000 companies
across 41 different countries
and found that employers in
western Europe are the best
paymasters. It found that com-
pany’s in developed countries
focus more on variable factors.
“We are now looking at con-
solidating our position with a
sales office here, which will ex-
clusively deal with Indian cus-
customized solutions, compo-
nents, semi-finished parts and
accessories,” Rattya said.
The range of special steel
products includes high-
strength structural steels (Op-
tim), wear-resistent steels
(Raex), ultra-high strength
formable steels (Litec) and spe-
cial coated roducts, with a full
offering of steel products ex-
tending from standard to spe-
cial steel products.
Rukki has also entered into
marketing agreements with
about 100 customers in India
that include Tata Motors, Hyva,
Caterpillar, BEML, JCBL Mar-
rel and Telcon among others.
It has tied up with Steelforce,
an Indian company to distrib-
ute its special steel and prod-
ucts.
Ruukki has operations in 27
countries and employs 11,700
people.
DH News Service
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Retail stocks surge
MUMBAI, DHNS: Even as the
Bombay Stock Exchange’s key
benchmark closed 163 points
lower on Friday, retail stocks
surged close to 20 per cent as
the market selectively cheered
the government’s decision to
allow 51 per cent foreign direct
investment (FDI) in multi-
brand retail and 100 per cent
FDI in single-brand retail.
The Future group’s Pan-
taloon Retail gained the most,
up 17 per cent in morning
trade, and closed at Rs 234.05.
Tata group’s Trent was up 7.84
per cent, while Shoppers’ Stop
surged 4.77 per cent and CESC
jumped 7.73 per cent as
Spencer’s Retail is a unit of of
CESC -- the power utilities busi-
ness of the diversified RPG
Group.
Analysts are of the view that
FDI in retail benefit Pantaloon
the most as it will help trim its
huge debt and enable it to con-
tinue expansion. The company
reported to had talks with
French retail giant Carrefour.
It will also help Tata’s retail ven-
ture Trent (headed by Ratan
Tata’s half-brother Noel Tata)
as it continues to seek tie ups
with global retailers who are
eagerly waiting to enter India.
Trent may expand its tie-up
with Britain’s Tesco, possibly
for a front-end joint venture, as
per analysts.
Among others, Reliance Re-
tail, CESC’s Spencers’ retail,
Aditya Birla Retail and Kou-
FinMin approval for 18 FDI Bharti, RIL
proposals worth Rs 2,126 cr insurance deal
NEW DELHI, PTI: The Finance
Ministry, on Friday, approved
18 FDI proposals, including
that of Dish TV and MCX, en-
visaging foreign investment of
Rs 2,126 crore, while referring
the application of Unitech
Wireless to Cabinet.
The proposals were cleared
following recommendations of
Foreign Investment Promotion
Board (FIPB).
However, decision on 16 pro-
posals including that of Reli-
gare Capital Markets and Cor-
dia International Corp, USA,
was deferred and 11 were re-
jected, the Finance Ministry
said.
The request of “Unitech
Wireless (TN), amounting to
Rs 8,250 crore, has been rec-
ommended for consideration
of Cabinet Committee on Eco-
nomic Affairs (CCEA),” the
statement said.
The company is seeking for-
eign investment to promote its
telecom business including uni-
fied access services. FDI pro-
from across
and events
from the
P16
tons too stand to gain. Specu-
lation is rife that Bharti could
extend its back-end alliance
with WalMart to the front-end.
Till about a month ago most
retailers’ stocks were de-
pressed, weighed down by bal-
looning debts, slowing sales
and lack of clarity on FDI till
now. For instance, shares of
Pantaloon, Koutons and Vishal
Retail have fallen by 30-37 per
cent since April this year.
Commenting on the move,
Edelweiss Securities’ Harsh
Mehta and Abneesh Roy said:
“The decision to open the retail
sector’s doors has come at the
right time when global players,
facing headwinds in their home
countries, are scouting for new
markets and on the other hand
domestic players are strangu-
lated by piling debt.”
Kotak Institutional Equities’
Manoj Menon and Amrita
Basu said: “Cabinet approval is
a step in the right direction to
open up the retail sector to in-
ternational players. The policy
will give an opportunity to es-
tablished domestic retail play-
ers to unlock value.”
However, the cabinet ap-
proval is only the first step, and
doesn’t mean that FDI will flow
into the sector overnight. The
move is being opposed by op-
position parties, and even the
besides coalition partners are
saying that it would kill the
mom and pop stores spread
across the country.
posals envisaging investment
of over Rs 1,200 crore and
more are referred to CCEA for
clearance. It also said that de-
cision on Vodafone-Essar's re-
quest of transfer of shares from
resident to non-resident to car-
ry out the activities relating to
telecommunication could not
be taken as more deliberations
were needed.
“(Vodafone Essar’s Rs 2,835
crore) proposal has been rec-
ommended for the considera-
tion...after the receipt of inputs
from concerned departments,”
it added.
The government cleared
Dish TV India's Rs 980 crore
proposal to raise foreign equity
to produce telecom equipment
and marketing of mobile satel-
lite communications.
The statement further said
MCX’s (Multi Commodity Ex-
change of India) request for
sale of equity shares through
an Initial Public Offering (IPO)
to Indians and Sebi registered
FIIs has also been cleared.
DECCANHERALD 17
»
India Inc hails
FDI policy push
BANGALORE, DHNS: India Inc
has been unanimous in wel-
coming the Centre’s move to
allow 51 per cent foreign direct
investment in multi-brand re-
tail.
Observing that a first step
has been taken, Ficci President
Harsh Mariwala, said it would
have positive implications for
various segments like food pro-
cessing, farming and SMEs and
bring in more investments not
just in the front-end but also in
the backend infrastructure.
This, he notes, would result in
reduced wastages and help in
addressing the issue of inflation
over a period of time.
Likewise, stating that Con-
federation of Indian Industry
strongly supports the Centre’s
proposal, CII Preseident B
Muthuraman, noted that it
would generate significant em-
ployment and open up big tick-
et opportunities for expansion
in organised retail and bring in
substantial investment in back-
end infrastructure like cold
chains, warehousing, logistics
and expansion of contract
farming. CII said the move is
expected to substantially ben-
efit consumers with farm pro-
duce being available at much
lower prices. Describing the
Centre’s move as a first step to-
wards initiating second wave
of reforms, Bangalore Cham-
ber of Industry & Commerce
President Vinod Nowal said the
policy would set the pace for a
second wave of economic re-
forms essential to attract global
capital that will bolster the In-
dian economy towards positive
growth. Besides generating
huge employment opportuni-
ties the new policy would allow
several giant global corpora-
tions to set up shop in India.
called off
NEW DELHI, PTI: Bharti Enter-
prises and Reliance Industries,
on Friday, terminated talks for
the stake sale in Bharti AXA in-
surance companies due to dif-
ferences over issues related to
long term vision and joint gov-
ernance.
“AXA, Bharti, Reliance In-
dustries (RIL) and its associate
Reliance Industrial Infrastruc-
ture (RIIL) announced today
that they have mutually agreed
to terminate their negotiations
on the proposed acquisition by
RIL and RIIL of Bharti’s share-
holding of 74 per cent in Bharti
AXA Life Insurance and Bharti
AXA General Insurance,”
Bharti said. RIL said the talks
were terminated as parties had
failed to “reach agreement on
long-term vision and joint gov-
ernance of the ventures.”
After 5 years of its associa-
tion with AXA, Bharti said in
June it would exit from the fi-
nancial services JVs and sell its
74 per cent stake to RIL.