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By
Deepak Dayal, Managing Partner , Dayal Legal Associates
The BPLR system has been drawing flak from various quarters on account of the larger percentage of loan disbursals made at sub?BPLR rates, which was a bottleneck for establishing transparency. Under the new regime, the actual lending rates have to adhere to the base rate decided by the bank. Also the lending rates cannot be lower than the base rate. However, according to RBI guidelines, banks will get some time to stabilize to the system of base rate calculation. Banks are permitted to change the benchmark and methodology any time during the initial six month period i.e. till the end of December 2010. While
RBI has given six months to banks to adopt the new system, in the meantime it
is The
old borrowers would not be affected by the change according to RBI guidelines.
However, the limited period offer would be affected or could be withdrawn depending
on the cost of funds. Most PSU banks are expected to peg their base rate in the
range of 8?9 percent private banks What is BPLR? What does BPLR stands for in banking? What is the What is BPLR? What does BPLR stands for in banking? What is the full form of BPLR? What is Benchmark Prime Lending Rate? In
banking parlance, the BPLR meant the Benchmark Prime Lending Rate. BPLR was the
interest rate that commercial banks normally charge (or we can say they are expected
to charge) their most credit?worthy customers. Although as per Reserve Bank of
India rules, Banks were free to fix Benchmark Prime Lending Rate (BPLR) for credit
limits over Rs.2 lakh with the approval of their respective Boards yet BPLR had
to be declared and made uniformly applicable at all the branches. The
banks in the past may authorize their Asset?Liability Management Committee (ALCO)
to fix interest rates on Deposits and Advances, subject to their reporting to
the Board immediately thereafter. The banks should also declare the maximum spread
over BPLR with the approval of the ALCO/Board for all advances. The
bank rate is the rate at which central bank of the country (in India it is RBI)
allows finance to commercial banks. Bank Rate is a tool, which central bank uses
for short?term purposes. Current
Bank Rate 6.00 percent (from April 29 , 2003) What
is CRR? The Reserve Bank of India (Amendment) Bill, 2006 has been enacted and has come into force with its gazette notification. Consequent upon amendment to sub?Section 42(1), the Reserve Bank, having regard to the needs of securing the onetary stability in the country, can prescribe Cash Reserve Ratio (CRR) for scheduled banks without any floor rate or ceiling rate. [Before the enactment of this amendment, in terms of Section 42(1) of the RBI Act, the Reserve Bank could prescribe CRR for scheduled banks between 3 per cent and 20 per cent of total of their demand and time liabilities]. RBI uses CRR either to drain excess liquidity or to release funds needed for the economy from time to time. Increase in CRR means that banks have less funds available and money is sucked out of circulation. Thus we can say that this serves duel purposes i.e. it not only ensures that a portion of bank deposits is totally risk?free, but also enables RBI to control liquidity in the system, and thereby, inflation by tying the hands of the banks in lending money. Cash Reserve Ratio (CRR) 6.00 (from April 24 , 2010) increased from 5.00 percent to 5.50 percent from February 13 , 2010; and then again to 5.75 percent from February 27 , 2010; and now to 6.00 percent from April 24 , 2010 What
is SLR? Statutory
Liquidity Ratio (SLR) 25 percent from November 7, 2009 increased from 24 percent
which was What
are Repo rate and Reverse Repo rate? Reverse
Repo rate is the rate at which banks park their short?term excess liquidity with
the RBI. The RBI uses this tool when it feels there is too much money floating
in the banking system. An increase in the reverse repo rate means that the RBI
will borrow money from the banks at a higher rate of interest. As a result, banks
would prefer to keep their money with the liquidity is injected in the banking system by RBI, whereas Reverse repo rate signifies the rate at which the central bank absorbs liquidity from the banks. Reverse
Repo Rate 3.75 percent (from April 20 , 2010) increased from 3.25 percent from
March 19 , 2010(which was continuing since April 21, 2009) now increased to 3.75
percent from April 20 , 2010 Thus, we can conclude that Repo Rate signifies the rate at which liquidity is injected in the banking system by RBI, whereas Reverse repo rate signifies the rate at which the central bank absorbs liquidity from the banks.
Unit-linked
insurance plans, ULIPs, are distinct from the more familiar policies sold for
decades by the Life Insurance Corporation. ULIPs also serve the same function
of providing insurance protection against death and provision of long-term savings,
but they are structured differently In a ULIP, the insurer deducts charges towards
life insurance (mortality charges or insurance premium), administration charges
and fund management charges . The rest of the premium is used to invest in a fund
that invests money in stocks or bonds The
policyholder's share in the fund is represented by the number of units.The value
of the unit is determined by the total value of all the investments made by the
fund divided by the number of units . The
14 companies mentioned in this order include Aegon Religare, Aviva, Bajaj Allianz
Life Insurance, Bharti AXA, Birla Sun Life, HDFC Standard Life, ICICI Prudential,
ING Vyasa Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India,
Reliance Life, SBI Life, TATA AIG Life The
Security Exchange Board of India (SEBI) contends that ULIPs offered by the insurance
companies are a combination of investment and insurance and, therefore, the investment
components are in the nature of mutual funds which can only be offered/launched
after obtaining registration from Sebi under section 12(1B) of the SEBI Act. However,
they have not obtained any certificate of registration from Sebi though the ULIPs
launched by them had an investment component in the nature of mutual funds, as
mandated by the SEBI Act First,
in a reaction to the SEBI order, IRDA retaliated by invoking its power under Section
34(1) of the Insurance Act, directing insurance companies to disregard the order
from SEBI and proceed further with their business as usual. "No
person shall sponsor or cause to be sponsored or carry on or caused to be carried
on any venture capital funds or collective investment schemes including mutual
funds, unless he obtains a certificate of registration from the Board in accordance
with the regulations." Where
by under this section SEBI is of the opinion that ULIP is being in the nature
of Mutual Funds therefore under its ambit as attributes of the ULIPs launched/offered
by insurance companies are different from the traditional insurance products and
they are a combination of insurance and investment. IRDA contends that section 11AA (3) of the SEBI Act excludes 'contracts of insurance' from the purview of a collective investment scheme as enumerated under Section 11AA (2) of the SEBI Act. SEBI
contends that the attributes of the investment component of ULIPs launched by
these entities are akin to the characteristics of mutual funds which issue units
to the investors and provide exit at net asset value of the underlying portfolio. IRDA
says the Sebi Act (as well as several committee reports of Sebi) clearly recognizes
the fact that, conceptually, a mutual fund is in the nature of a Collective Investment
Scheme (CIS), which Sebi is authorized to regulate. Section
11AA of the Sebi Act expressly states that a contract of insurance which comes
under the Insurance Act shall not be deemed to be a CIS. The
Life Insurance business" is defined under Section 2(11) of the Insurance
Act, 1938, inter alia, to mean the 'business of effecting contracts of insurance
upon human life' or 'the happening of any contingency dependent on human life'.
"The said definition indicates that the policy is dependent on the happening
or the non-happening of an event linked to human life," insurance companies
argued. In
terms of section 11(1) of the SEBI Act one of the duties of SEBI is to protect
the interests of the investors in securities and to promote the development of,
and to regulate, the securities market by such measures as it thinks fit. Section
11(2) of the SEBI Act enumerates certain illustrative measures which can be taken
by SEBI without prejudice to the provision of sub-section (1). One
such measure is registering and regulating the working of collective investment
schemes including mutual funds. To carry out the purposes of sections 11 and 12(1B)
ULIPs fall under the definition of Life Insurance products. Unit Linked Life Insurance
Business is defined in IRDA (Investment) Regulations, 2000. Regulation 3(3) states
: Regulators
SEBI and IRDA agreed to settle the issue of jurisdiction over ULIPs mutually at
the High Level Coordination Committee(HLCC) set up by the government. The Government asked SEBI and IRDA to move court immediately on the contentious issue of who will regulate unit-linked insurance products . SEBI, IRDA, Ministry of Finance Officials met and decided to maintain status quo and allow selling of ULIPs,in the market . The final round of talks are still underway and a concrete output is expected soon. (editor@thesynergyonline.com)
Excerpts : Q. What are areas identified for investments in Mauritius? Elaborate in details. A.
We are building a multi-pillar economy to create more resilience to external shocks.
The sugar industry, a pillar of development since colonial times, is consolidating
and restructuring. Producers are also expanding into related activities, such
as power generation from sugar cane residue (bagasse) and ethanol production,
and are moving up the supply chain into refined sugar. The development of "flexi-factories"
able to switch production between sugar and ethanol will make the sector more
adaptable and responsive to developments in international markets. In
addition to encouraging the restructuring and modernization of the sugar and textile
sectors, the government is putting much emphasis on the development of the ICT
sector. A growing number of multinationals are choosing Mauritius for our bilingual
workforce, our convenient time zone, state-of-the-art infrastructure and open-economy
environment. Emphasis
is also being made on the promotion of Mauritius as a seafood hub in the region,
using existing logistics and distribution facilities at the Freeport. To further diversify the economic base and generate sustainable growth, the government is also actively encouraging the following economic activities: the land-based oceanic industry, hospitality and property development, healthcare and biomedical industry, agri-processing and biotechnology, the knowledge industry, renewable energy and creative industry. Q. Key areas of your country's industrial growth is losing sheen. What measures do you propose to take to boost growth? A.
Mauritius has survived the worst economic recession in many decades with minimum
adverse impact. We are now seeing encouraging signs of a global recovery. We must
seize the opportunities and shape our recovery so that the growth path can be
more resilient. No
investment means no growth. And no growth means no employment creation. We therefore
came up with measures to boost investment across all sectors. In 2006, we implemented bold reforms. Our development model relied too heavily on trade preferences in a globalizing world. We therefore replaced it with a paradigm centred on global competitiveness supported by reforms aimed at creating greater openness of the country, a re-engineered doing business environment, an accelerated diversification of the economy, a flexible labour market and a simple, more efficient and competitive tax system. As
a result of the reforms, we have strengthened our economy with robust growth for
four consecutive years and foreign direct investment is flowing into the country
at unprecedented rates. Efforts have been made to consolidate and strengthened our traditional economic pillars. At a certain point in time, the agro-industry and textile sectors have been losing competitive advantage following the erosion of trade preferences. However, the textile industry regained its buoyancy after four years of despair and over the past two years, the sugarcane industry has regained vitality and expanded by around 22 percent. This growth is attributed to the transformation of the sugar industry into a sugar cane industry producing higher value added sugar, energy, ethanol and other by-products. As regards textiles we are moving from traditional markets to niche markets and more specialized products. Efforts are being made to diversify our economic base and create new activities and new sectors. Q .What is your growth rate? How much growth do you foresee in the next five years and what are your major policy initiatives for economic development? A.
The recent economic downturn was the worse crisis that the world has ever known.
Mauritius was in no way immune to these turbulences, however its economy proved
to be resilient to such external shocks. Despite the worldwide recession, the
Mauritian economy saw a positive GDP growth of 2.8% and attracted around MUR 8.4
billion of FDI. This exceptional performance was due to several measures that were initiated with foresight and ahead of the rest of the region to strengthen the country's economy. Government initiated a series of far-reaching reforms back in 2005 and, in 2008, it was prescient in saving some 3 percent of GDP in special funds for the difficult times to come. Through
a track record of strong policy responses, government further strengthened the
country's resilience to external shocks. Stimulus measures were implemented, which
proved to be timely, innovative, comprehensive and effective. Government stimulated
the economy through expansionary macroeconomic policies; frontloaded public infrastructure
projects to save and create jobs; supported micro, small, medium and large enterprises
that were in difficulty; protected the vulnerable, the unemployed and the retrenched
workers; and prepared the country for recovery. Today,
the Mauritian economy is resuming its growth path prior to the economic downturn
and its GDP is expected to grow by 4.5% this year. The success of the country's
new development paradigm is today reflected not only in economic figures, but
also in the optimistic mood in the country. It rests on a strong base that we
have built and strengthened over the years, which include economic stability,
strong government support, strong public-private partnership, the rule of law,
transparent institutions, ease of doing business, a business friendly environment
and a modern and reliable infrastructure. The
country's major policies for economic growth are trade liberalization, the cancellation
of price control on certain commodities, the simplification of business regulations,
far-reaching tax reform and fiscal consolidation and sound monetary policy to
keep inflation under control. Mauritius is well positioned to become a new regional base for world class education services. It has a tradition of excellence and a stable living environment. Tertiary enrollment in Sub-Saharan Africa is growing at some 15 % annually. The country's tertiary education sector comprises 9 publicly funded institutions, 37 private institutions with international awarding bodies and 3 regional institutions. In addition, more than 350 private training centres are registered and operational in specialized verticals. There are three universities in Mauritius, all of them dispensing education of world-class level: The University of Mauritius, The University of Technology, The Open University of Mauritius. Furthermore, Mauritius has attracted several internationally recognized tertiary education institutions such as the Apollo Bramwell Nursing School, Birla Institute of Technology, Ecole de Medecine Louis Pasteur, Vatel and JSS Academy. These projects will now be complemented with international public sector capacity building institutions. We are tapping the potential for Mauritius to run a Development Programme of technical assistance and capacity building for African states under the aegis of the Regional Multi-Disciplinary Centre of Excellence (RMCE) and the IMF's AFRITAC South.
A.
We are working on the development of new avenues and new sectors such as the creative
arts industry, land-based oceanic industry and renewable energy which I am convinced
have lots of potential and will materialize shortly. Q. Enumerate new initiatives for economic development. What is your FDI policy? What are factors for flow of investments in Mauritius when FDI is witnessing global slowdown? A
.During the economic downturn, we undertook measures that enabled the country
to resist external shocks. Now that the global economy is recovering, we are taking
measures to shape our recovery. These include the restructuring of funds in view
of changing priorities; investment in infrastructure - building eco friendly infrastructure
(new roads with pavements and bicycle tracks, new runway at the airport, port
developments etc); and shoring up the SME Sector. We will also be developing the
competitive competence that the country needs, for example investing in science
technology and innovation, providing education for all and for development, breaking
new ground for our entrepreneurs ('Work from Home' BPO scheme; allow companies
operating Direct to Home satellite broadcasting in the region, but not operating
on the local market to be 100% foreign-owned) etc. FDI
is today more diversified than in the past, coming from various countries and
flowing into almost all sectors of the economy. Q.. Given special thrust on ICT, IT-enabled/BPO etc what is the blueprint for next five years from 2010. What is the scene of office space market in Mauritius and what are your steps to take it forward? A.
ICT is an emerging sector. In 2005, it accounted for 0.5% of GDP and now it accounts
for 5.5%. We had 40 companies operating in the IT/BPO space employing 4000 people.
By December 2009, the number of companies rose to 300 with employment reaching
12,000. We started with the low end of the market: voice based and contact centres.
We
have now moved to value-added activities such as Financial, Legal, Medical BPO,
Software Development, Multimedia Development, Data Centres for Business Continuity
and Disaster Recovery representing 60% of the activities today. Through
a well developed digital network infrastructure, excellent telecommunication facilities
and access to a scalable and stable power grid, Mauritius is emerging as a regional
hub for the provision of outsourcing services and telecoms switching. The Government
of Mauritius has set the building blocks to position Mauritius as a global centre
for data hosting, disaster recovery, shared services and other high value added
services. Our blueprint for the next five years is as follows. First, we will emphasize the creation human resource and infrastructure capacity. The IVTB and the Outsourcing and Telecommunications Association of Mauritius have started a programme providing training with placement to …….. This programme is being scaled up and expanded to BPO and software development to cater ….. We will also continue our efforts to lower the prices even further. Since
October, Mauritius is linked via fibre optic cable to Madagascar and Reunion island
through the Lower Indian Ocean Network (LION) project. The second phase will connect
the three islands to an international gateway that will increase capacity and
provide redundancy to support development of the ICT sector. The cable when fully
operational in 2011 will increase bandwidth several times at a lower cost. Secondly, we will develop specialization in ICT-BPO services. The country is becoming a major destination for knowledge and BPO in the medical sector. The medical outsourcing market is expected to grow significantly, and Mauritius has what it takes to become a global player in medical outsourcing. A significant number of companies are involved in medical transcription, translation of medical documents, medical image processing, medical claims management and more. In addition, Mauritius is confidently moving towards high-end medical services such as telemedicine and teleradiology. Q. Is there any plan for development of tourism in Mauritius? Describe in detail. A.
The number of tourist arrivals in 2009 was over 871,000. Mauritius is a very popular
as a high-end, luxury holiday destination. We now want to take the industry one
step beyond the established 'sun, sea and beach' image. We
also wish to develop Mauritius as a wellness destination. This would involve spas,
as well as sports (for example, golf, water sports, soft eco-tourism such as kayaking,
canoeing, cyclo holidays etc). Finally, we will be developing the sector for cruises in this part of the Indian Ocean. Government is investing in the development of a cruise terminal, which will be fully operational by the end of the year. Q..
What benefits can Mauritius offer to investors and professionals? A.
Since 2006, bold reforms were introduced to open up the economy and to attract
people to work and live in Mauritius. The Business Facilitation Act makes it easy
to live and work on the island if you have something to offer to the economy.
If you are an investor and have an interesting project, you are encouraged to
set up a business on the island. There is no minimum investment but your proposed
business activity should generate an annual turnover of at least MUR 3 million.
If you are self-employed and want to set-up your own activities, this is also
possible and your proposed activity should generate an annual turnover of at least
MUR 600,000. A professional can also work and live in the country provided that
he has a contract of employment and a minimum salary of MUR 30,000 per month.
The investor, the self-employed or the professional if they satisfy the eligibility criteria will obtain an Occupation Permit, permit that combines a work and residence permit, for three years. The Occupation Permit can be obtained within three working days. Q. How many agreements has Mauritius signed with India?
The
other important agreement that has been signed is an Investment Promotion and
Protection Agreement (IPPA) in 1998 to protect the interest of investors investing
in the respective countries. Other MoUs have been signed in different areas and include namely, an MOU on Air Services Agreements, on cooperation in the field of non-conventional energy sources, on science and technology as well as on Sports Exchange and Cooperation. . Q.
Why have you chosen India as a potential country to target investment? A.
Mauritius has special historical, cultural, religious and kinship ties with
India. Nearly 70% of our population is of Indian origin. Even before the country's
independence, people in Mauritius had close relations with the people of India.
Today, the two countries share very close and unique relations which encompass
virtually all aspects bilateral and multilateral relations. The two sides maintain
frequent high-level exchanges. The two countries also share very strong economic
ties. Many
Indian companies have already invested in Mauritius in various fields including
energy (Indian Oil), telecommunications (MTML), banking (SBI), hospitality, the
medical and pharmaceutical fields as well as ICT etc. We want to attract more
Indian players in Mauritius as we feel that Mauritius could be an interesting
platform for them to penetrate the African market. Mauritius has been extensively use for inward investment in India as many investors have been using the Mauritian route to invest in India. However we would like to show more Indian companies using Mauritius as their platform for outward investment. We recently conducted an investment mission to India which was led by the VPM in order to sensitise Indian investors about the possibility of using Mauritius as a gateway for penetrating the Eastern and Southern African markets. (editor@thesynergyonline.com)
As a practitioner of brand management I am also a proponent of social media, often
speak endlessly before the client to convince as to how social media is valuable.
But the role of social media is effective only when we make use of a prudent media
mix, including the traditional media, television and social media. Unfortunately, what is happening is that like in the early days of Web design, SEO, PPC, email, and banners before it, there's too much swooning and not enough thinking about social media right now. PR professionals are so engrossed in "how to use it" that they often don't even think "why to use it". The
philosophy of relying on the exclusive use of social media under the pretext of
the target audience being net savvy is in my opinion an anti-thesis of branding.
This is because the very ethos of branding suggests that the brand is built by
audience far greater than those who actually use the product. But at times such
quick-fix solutions seem to be a win-win situation for both the agency and the
client, since this agency also quotes the least price in the competitive pitch. It
seems the US Presidential elections and the emergence of the Social Media President
in Barack Obama has made the public relations professionals across the world vouch
for the use of new age technology to spread the awareness campaign. In almost
all the competitive pitch where we have presented our PR plan, I feel we are not
just obsessed but also suffer from obsessive compulsive disorder as far as the
use of social media is concerned. While it is true that the American President's
use of the social media will go in the folklore of the PR history for the participation
and communication with all American citizens, the question remains: can every
PR campaign or brand recreate this kind of two-way conversation in every society? The
question becomes all the more critical in India since there have not been very
many scientific studies to understand the audience's concern which is always critical
to the success of any PR campaign. As a practitioner of the trade, my understanding
is that it was the overall PR strategy and not mere social media tactics that
was critical to the success of the American President's campaign. After all, it
is the PR strategy that defines the success or failure of any brand or campaign
and Barack Obama's success has been no exception. Public
Relations strategy is all about the process of identifying what is top of mind
in a community and relating your brand, product, organization or campaign to what
is most relevant to your community. That process is really all about listening
to your audience and making what you have today relevant to their concerns. PR
strategists have to first of all become true marketers to understand that what
consumer wants, what they get, where are the gaps and how their product can fit
into that gap. The same logic goes true for the foot soldiers of PR who deal with
the media on a day-to-day basis. Many
of the PR practitioners today would lead you to believe that social media is ready
for prime time and that you should forsake all other forms of publicity. That
is probably a wishful thinking which is too ahead of its time. While consumers
clearly want to engage with brands in social media, the number of social media
users, though growing fast, is not yet overwhelmingly large. Moreover, the fallacy
of "we'll engage with our customers and let them do our publicity for us
by telling their friends" reads well in a marketing plan, but is exceptionally
difficult to execute unless your brand is compelling in a way that most simply
aren't. What
has become fancy but unavoidable today is that more for our own convenience than
any strategic reasons we often try to convince the clients for the use of social
media. This saves the agency from the dirty job of dealing with the journalists
who belong to the traditional media. Social media channels can be highly effective
public relations tools, but they can't replace traditional media entirely. Successful
public relations programs meld social media and traditional media with other communications
tools and techniques. Social Media has the potential to penetrate deep into the target audience but it is finally PR Professionals who have to position themselves as the best qualified to oversee the extent of social media mechanisms an organization uses to communicate with its stakeholders. This is essentially because public relations by its very philosophy puts a high priority on the whole organization-stake holder relationship than marketing or advertising does. (editor@thesynergyonline.com)
The monitoring of the admissions in private medical colleges is entrusted to the "Admission Monitoring Committee" which is to be constituted in each State under the chairmanship of a Retd. Judge of the High Court nominated by the Chief Justice of the respective States. In respect of admissions in Govt. colleges, they are monitored by the Secretary or the Director of Medical Education. The
determination of the fee payable by the student and the monitoring of the payment
of fee are vested with the "Fee Monitoring Committee" which is to be
constituted in each State under the chairmanship of a Retd. Judge of the High
Court who is nominated by the Chief Justice of the State. As
regards the admissions in the medical colleges of Deemed Universities, they are
regulated by the rules & regulations prescribed by the University Grants Commission.
Such admissions are made on the basis of the merit at the entrance examination
conducted by each Deemed University separately as per the guidelines issued by
the University Grants Commission. The role and responsibility of the Medical Council of India is limited to oversee certain parameters. All the candidates admitted to the medical course should have passed 10+2 examination of Science stream with Physics, Chemistry, Biology and English as principal subjects and should have secured minimum 50 per cent marks (40 per cent for reserved candidates) at 10+2 examination in the subjects of Physics, Chemistry, Biology taken together and also in entrance examination. The institute should have made admissions within the permitted intake. All
the admissions should have been done before 30th September as per the Time Schedule
prescribed in the Regulations. For
several reasons than one, the private capital has come to stay in the domain of
medical education in addition to public funded subsidized medical education in
Govt. run medical colleges/institution in the country. The operation of private
capital in medical education brought into focus several issues which were required
to be adjudicated by the courts of law from time to time. To
begin with, it was in Unnikrishnan's case that the apex court held that the 85
per cent of the annual intake of the unaided privately run medical college, the
admissions would be made by the concerned State Govt. from their merit list and
15 per cent was designated to be the 'management quota' at the discretion of the
management. The fee prescribed was also on the basis of 'cross subsidy' to the effect that the 50 per cent of the admissions made by the State in the unaided colleges, the chargeable fee was same as was in the Govt. run medical colleges. The
fee chargeable from the 35 per cent of the seats was higher than the first category,
and the 15 per cent quota admitted against the management category the chargeable
fee was the highest. The scheme that was worked out was that student admitted
in the 35 per cent of the seats by the State Govt. and the 15 per cent against
management quota by the management was higher, to compensate for the subsidized
fee chargeable from the 50 per cent of the admissions made by the State in such
colleges. Further,
the availing of 'common entrance test' for admission to medical colleges was worked
out by the Supreme Court in Shri Chander Chinar Bada Akhada Udasin Vs. State of
J&K wherein it was brought out that "as the %age of marks secured by
different applicant at different type of qualifying examinations cannot be treated
as uniform, hence there is a need of common entrance examination". This
contention was further availed by the Supreme Court in case of Preeti Srivasatava
vs. State of MP wherein it was brought out that the "standard of candidate
is directly related to the standard of education meaning thereby that higher is
the merit of the candidate, higher would be standard of education as well."
In
1998 in Ravinder Kumar Roy vs. State of Maharashtra case, Govt. of Maharashtra
was directed to hold a Common Entrance Test for admission to medical colleges
by the Apex Court. As such, Section 5 of Regulations governing Graduate Medical
Education notified by the Medical Council of India mandate common entrance test
for admissions for 'All India character' medical institution and by States where
there is more than one medical college and more than one examining board for qualifying
examination. The
Apex court in its judgment in TMA Pai foundation is while upholding the 'cost
based education' categorically brought out that its decision in Unnikrishnan's
case in so far as it framed the scheme relating to the grant of admission and
fixing of the fee was not correct and to that extent the decision and the consequent
direction given to Medical Council of India and Central & State Govts. was
over-ruled. It observed that "surrendering the total process of the selection
to the State was unreasonable as was sought to be done in 'Unnikrishnan scheme'. The
apex court in its verdict in Ismalic Academic Education Vs. State of Karnataka
directed that in order to give effect to the judgment in TMA Pai case the
respective State Govt., concerned authority shall set up in each State a committee
headed by a Retd. High Court Judge nominated by the Chief Justice of the State
with another member nominated by the Judge who shall be a Chartered Accountant
and a representative of the Medical Council of India for the purposes of 'monitoring'
the chargeable tuition fee. It
also advocated holding of the Common Entrance Test by the unaided colleges in
the concerned States which would be monitored by another Committee which also
headed by a Retd. High Court Judge to be nominated by Chief Justice of the State
so as to ensure that it is fair and transparent. As such, it validated the 'fee
revision committee' as well as "Admission Monitoring Committee" as proposed
in TMA Pai foundation case as well. In
P.A. Inamdar Vs. State of Maharashtra case in 2005 among other things,
the apex court prescribed that the "committees" regulating admission
procedure and fee structure shall exist only as a temporary measure and an inevitable
phase until the Central Government or State Govt. are able to devise a suitable
mechanism and appoint a competent authority through the required legislation.
All the above mentioned facts clearly suggest that the MCI is carrying out its role scrupulously since 2004 and the Council has issued discharge notices from time to time when it has been observed that the students have been admitted in violation of the above mentioned norms. There are twin issues pertaining to the professional education including medical education that confront the common people at large in a big way namely -the modality of admission and the chargeable tuition fee. Now the MCI can't be blamed for reasons which don't fall out of its jurisdiction.(editor@thesynergyonline.com)
While
in a section of the industry there are negative reports of distress selling, a
few realistic realtors in the country are smartly turning this adversity into
opportunity. Eradicating the demand and supply mismatch and coming out with more
and more affordable housing is one of the options. But what is actually proving
to be a saving grace for the industry today is to diversify and foray into other
business which may not be our core of expertise to begin with. I
feel proud to say that a clutch of developers in India have of late shown the
way to the world. These are the realtors who have realised that there is a safe
haven which is also recession proof and hence are chalking up plans to invest
in the education sector. In the last one month, five real estate developers have
announced plans of setting up business schools across the country with the combined
investment exceeding Rs 1000 crore. In the endeavour to catch pace with the growth plan in this emerging sector, the real estate sector has started realizing the fact that they should not be just into the construction business. We have to be a part of the holistic infrastructure development of the nation. What better way to move into that direction than create infrastructure for the education sector. It makes business sense and at the same time it makes the industry become mature and also contribute to the social concern. Critics may condemn the industry for diversifying out of compulsion to keep the show going. However, it is an established fact that even when there was a bull phase with market sentiments appearing very promising, many of the realty companies had diversified into telecom and other sectors. As an industry we must have the conviction to believe that we are diversifying because we feel there is a need to grow beyond our core area of competence as well. Moreover, it is also true that every enterprising business house is always in the look out for greener pastures, whether or no slowdown. So, for many of the realty companies this diversification has been a well thought-out strategy and they had started working on it even before the market had witnessed slowdown. And diversification into a sector which is more or less recession proof with good cash flow only reflects that real estate has been a sector with vision and foresight. This may not be true for everybody but many of the developers have always been forward looking in their approach to the business. That is precisely the reason why the industry is forming the union with various schools and management institutions. This partnership will combine the strengths of both the sectors synergistically. We are pooling our assets holistically to have access to better resources, be it manpower, intellectual capital, infrastructure or finance. Actually both the sectors compliment each other with their respective expertise. The
model has worked successfully in some countries like US and Canada. With diminished
demand for housing and a cash constraint, it is a natural progression for many
developers with available land banks. I feel that this is the right sector for
investment which is upbeat, risk free and where revenue is growing at more than
50 per cent across the industry. The
best of the deal is that the trend is being seen pan India and the builders in
south too have taken a plunge in the sector. The reason for the rush into education
is the burgeoning demand supply gap and also a logical extension into an adjacent
category for builders who have the necessary wherewithal. High rate of returns
on investment coupled with huge imbalance in demand supply is attracting real
estate players towards the sector who will be at ease in setting up the required
infrastructure who already have land banks with them. The diversification won't be an easy one, as similar initiatives have flopped in China. The real challenge would be in the wake of competition among the developers. It is then that the differentiator between chalk and cheese will have to be established. Those who are determined to take the quality Indian education forward to the international platform will emerge victorious. Now that certainly sounds like an attractive proposition for an industry which is new to the knowledge driven sector of education. (editor@thesynergyonline.com)
Today if you think of any industry, and this is even more relevant from media point of view, you have a face who comes into mind as the voice of the industry. Unfortunately, the same cannot be said for the real estate sector which emerged as the second largest economic activity in the country without any policy incentive. Before we get into arguing hows and whys of this leadership crisis in the realty sector and before we shift the blame on to the global economic meltdown, I feel this is high time we must also set our own house in order. Having said this, however, I must admit that we have come a long way in a short span of time. This has happened even when our oft-repeated genuine concerns about getting the industry status has fallen on the deaf ears. The initiatives of realty companies in the form of coming together under the banner of CREDAI and NAREDCO have made us realize the potential of our collective strength on occasions more than once. However, in the absence of consensus on many pressing issues, and in the absence of any policy guidelines for the industry, developers in India are often left at the mercy of all—buyers, investors, bankers and others. It is here that we need to address our concerns for having an industry leader who could raise a voice for the industry and whose face has acceptance within the industry, government and media. If automobile industry today gets to face any setback, it has a Rahul Bajaj who would be found raising voice in media on the policy issue. But if realty sector is at the receiving end of one and all, there is an overall impression that companies will speak only about their cause and concerns and not the industry at large. Why? I do agree here that since our industry has got organized only recently, and since most of us have grown from the scratch, being the first generation entrepreneurs, we are probably not media savvy. At least we are not media driven to the extent certain other sectors are or to the extent media expects us to be. But what is inexplicable that even when our second generation has come at the helm of affairs, they do not get the kind of media and industry legitimacy the way they should be. It is this crisis factor for which we are not to be blamed. Because it is not just about the entrepreneurs, rather we as an industry have a huge talent pool with us in the form of professionals too. Gone are the days when we were seen as a mere construction activity and no white collared jobs to offer. Today our resource bank has got all kinds of professionals, including bureaucrats, technocrats, MBAs and journalists, to name a few. Real Estate is today also the largest economic activity post agriculture. But still none of our professionals, who may otherwise enjoy a commanding social acceptance in their given area of expertise, are seen as the face or the voice of the industry. The problem is with the mindset and not the substance, as it is made to believe. I suppose our phenomenal growth story in the last one decade has not gone down well with the critics. No wonder, in this hour of crisis, where almost every industry is facing the heat, it is made to believe that the realty market has crashed for ever. If the job retrenchment is an yardstick today, realty sector has probably seen the least of job cuts. At least we have not been on page one of national dailies with our employees crying to be retained. It is true that our profit margins have squeezed like never before, and our overall results have taken a beating, but then our fundamentals are sound enough to bounce back once the overall economy is back in shape. I take this opportunity to appeal to the policy makers, the media and the public in general that we are as much part of the country's growth story as any other sector, and hence don't let perceptions come in the way of giving us our due credit. Only then, we will emerge as backbone of a sound economy and a leadership will emerge within our industry too. (editor@thesynergyonline.com)
His reaction came in after Swan Telecom’s valuation created jitters leading to questions being raised on the low pricing of $2 Billion of 3G Spectrum by the Department of Telecom.
Mr. Chandrasekhar said in his letter that since Spectrum was an asset of the government and the people of India, it must be commercially compensated at the market value when it was being transferred to another entity or company. “The transaction clearly established irrefutable evidence that the government’s pricing for Spectrum of 4.4 MHz was far lower than the actual market value causing considerable loss to the exchequer. There is need for a comprehensive public policy when it comes to commercial terms of monetization of public assets like spectrum, minerals and natural resources so that the exchequer gets its due,” he said.
Mr. Chandrasekhar pointed out that the arbitrage between the value that the government was receiving for Spectrum and the actual market value was to the tune of around Rs. 8,000 to Rs. 9,000 crore. On a base price of nationwide spectrum at approximately Rs. 1540 crore, this was an appreciation in the hands of the private sector of almost 600 per cent in a few months, he said.(npsinha@thesynergyonline.com) STEEL
, CEMENT PRICES HITTING THE REALTY BUSINESS BUT DEVELOPERS ARE NOT SHFITING BURDEN
ON TO CUSTOMERS
The steel prices are soaring day by day as it has been increased by 60 per cent from last year, so the total input cost of any construction is been increased. Steel accounts for 15 per cent of construction costs and every escalation in the price of this material will increase the cost of construction and the average cost of freshly-developed real estate will end up 8 per cent to 10 per cent higher from original estimates. The cement price hike is rare occurrence as usually cement prices go down during the rains. Cement manufactures have increased price by 4 per cent in the last one year. When asked about the escalation in construction cost being transferred to customers . Mr Arora mentions that, "As steel and cement are one of the major raw materials used for construction and soaring price of raw materials definitely affects cost of construction, but the developers can not increase the price of the Flat/Shop due to contractual commitment. Therefore no escalation is being transferred to the customer and the respective losses are borne by the construction company only". The government took a set of fiscal measures to check surging steel prices. Finance Minister P. Chidambaram had announced imposition of 15 per cent export duty on hot rolled steel products, 10 per cent on cold rolled steel products, pipes and tubes and 5 per cent on galvanized sheets to disincentive exports and improves supply in the domestic market. Real estate Developers believe that such export cess won't affect the soaring price of steel. According to Harjeet Singh Arora, "The decision of imposition of 5 per cent to 15 per cent export cess on hot rolled steel products will not affect the real estate problems of surging steel price as these products constitutes very minor part of the total steel exports. The
withdrawal of export cess on steel products such as HRC doesn't really excite
developers, this does not help price of long to come down. As a developer we are
more concerned with the cost of long products. We are also concerned with the
price of iron ingots which are used by secondary manufacturers and re rollers
for making reinforced TMT bars, sarias and other structurals used in the construction
sector .So we could only be benefited if such fiscal measures are adopted for
ingot prices". The
rapid growth of the Indian economy had a cascading effect on demand for commercial
property to help meet the needs of business, such as modern offices, warehouses,
hotels and retail shopping centres. Growth in commercial office space requirement
is led by the burgeoning outsourcing and information technology (IT) industry
and organised retail. For example, IT and ITES alone is estimated to require 150
million sq ft across urban India by 2010. Similarly, the organised retail industry
is likely to require an additional 220 million sq ft by 2010. Real estate developers demanded drop off in the steel prices and warned that if the prices were unrestrained, plans for the Commonwealth Games 2010 would be hindered. This will also put a question mark on real estate efforts to provide affordable housing to middle and lower-middle segment buyers as prices of residential construction are bound to go up, sooner or later, if prices of steel are not checked on time. (npsinha@thesynergyonline.com) IS
INDIA AS STAINLESS AS THE THIRD WORLD?
Even the poor citizens on the street possess atleast one stainless product ie; a glass or a plate. The poor understands the life cycle cost attributes of stainless but the Industry and government are slower in comparison to a poor citizen when it comes to appreciate the advantage of going stainless! There are exceptions , ofcourse ! With Mr Laloo Yadav at the helm , Railways have recently taken the landmark decision to go stainless. Very soon , on the railway tracks all across the country, we shall see gleaming metro coaches , long distance high speed passenger coaches as well as wagons for carrying ores and tankers to carry corrosive petroleum products as well as drinking water & dairy milk. Thanks to the dedicated efforts of Stainless Enthusiasts, awareness is emerging fast on the use of Stainless Steel in Architecture, Building & Construction sector. With new Airports , Sea Ports, Highways , High Speed Rail Corridoors, Industrial parks , SEZs , Shopping Malls , townships , sports complexes for the Games and infrastructure development on the horizon of the Modern India , it is the most opportune moment for a global company like Outokumpu to share the latest trends in these applications and to support the emerging Indian demand to fulfill the aspirations of the young & old to see Stainless India. Outokumpu is one of the largest Stainless steel manufacturing company with a vision is to be the undisputed number one in stainless. Outokumpu is widely recognised as a world leader in product innovation , technical support, research and development. The Group employs about 8000 people in some 30 countries and has an annual turnover of over Euro 7 Billion. According to Mr. Yatinder Suri , Country Head, Outokumpu India ,Outokumpu Group has a long term vision for India and the first step was setting up the Indian Sales and Marketing office which has already completed one happening year in 2007 with ten members located in Delhi and Mumbai. This year the locations will expand to the southern as well as the eastern regions as well. Team Outokumpu India is going forward in line with the Group's vision to be the undisputed global leader in stainless. Outokumpu has displayed its commitment to the Indian markets further by deciding to start a warehouse in Mumbai in 2008 and to build a stock and processing center in the western part of the country in 2009. A feasibility study is being done to build a greenfield new cold rolling mill in India which will be completed in 2008 and the projected capacity would be approximately 250000 tons annually. Stock and processing will be operational in 2009 with an annual capacity of approximately 50 thousand tons. Outokumpu believes that one of the biggest challenges in India is to educate and enlighten the end users on the positive and environment friendly attributes of stainless steel so as to shift consumer and industrial preference to Stainless Steel. We have been organising workshops on architecture, building and construction as well as use of new innovative products for the most corrosive and critical applications like Oil & Gas, Process Plants, Desalination, Paper & Pulp etc. Our main focus is to make the end users understand that Stainless Steel is not an expensive metal as compared to carbon steel or aluminum. All end users can gain competitive advantage by proper selection of the appropriate grade of stainless steel for each corrosive application. As a policy senior experienced professionals from Sweden , Finland and the United Kingdom regularly visit India to share the latest innovations in products and applications in infrastructure areas through presentations. Outokumpu is launching STAINLESS STEEL REINFORCING BARS in the Indian market to introduce long life into concrete structures being built as a part of Indian Infrastructure development. With a long coastal area around the country, it has been concluded by technical experts that Duplex Stainless Steel is the ideal product for Indian infrastructure ( Ports , Airports, Bridges , water treatment and supply, high rise buildings etc) to get a very long life - over hundred years. Duplex
structural steel for bridges is also an emerging opportunity for the Indian investors
in infrastructure areas. Bridges and crash barriers on Highways, Railway bridges
and also the pedestrian bridges are shining examples of stainless applications.
Indians donot need to re-invent the wheel. Outokumpu is here with all tested and
successful stainless solutions to Corrosion problems in India - concludes Mr Yatinder
Suri.(npsinha@thesynergyonline.com) REALTY
SECTOR UNSUNG HERO IN FUELLING TOURISM*
However, this destination India odyssey would not have been possible had the realty revolution not happened in this part of the world. Howsoever majestic the charm of a place may be, travel & tourism can not grow unless there is a required infrastructure in place. Even though realty sector has always been an unsung hero in attracting the tourist inflow, I must say that infrastructure and tourism complement each other. Critics, no doubt, are questioning sharp run-up in prices and sustainability of the rise. And as any single market emerges as a favorite — stocks, bonds, real estate, precious metals or whatever —there is often a tendency to overdo it. In the initial phases of overvaluation, we begin to suspect it. India though, I must admit, still has a fairly long list of reasons why "this time it's different." Indian odyssey is based on the strong fundamentals. Over the next few years, India expects tourist arrivals to increase by a manifold. The driving force behind this strong tourism sector expansion is the government plan to develop tourism in the country as an essential component of an ambitious economic diversification drive. Infrastructure development has made travel to India a pleasure now. Adding fuel to the growth is the upcoming Commonwealth Games in the country. Economics 101 teaches that the only way to effectively bring down the now somewhat exorbitant real estate prices is to increase supply. In that regard, the country is luckier than the other emerging economies, because there is more room for additions to supply here. India's hotel industry expects the number of hotel rooms in the country to grow by 300 times as a result of the tourism industry push. No wonder, hotel industry is on the top of business radar of all the leading real estate players. India's own population is also growing fast. Together, country's expanding tourism sector, global retailers jumping in the fray and growing housing unit demands are fuelling an unprecedented construction sector expansion which is attracting top-name international investors and a steady flow of high-power investment. The country is full of internationally-acclaimed multi-billion-dollar development projects. International real estate companies are billing India as a top location and can barely keep up with client demand. In
the next few years, India's hospitality industry is going to require many new
luxury hotels, to keep up with the increase in tourist arrivals. This in turn
is creating growing demand for a complete range of building materials, equipment,
technology, systems and machinery. In the country as in
the rest of the developing economies, real estate continues to be the economic
sector that's getting most of the attention. India's disparate geographic areas
lead to a wide range of prices and markets. Because of the diversity of the Indian
real estate, and the country's size and room for expansion, local concerns about
affordability may be slightly less as the property market Our economic performance still remains quite healthy. One drag has been higher fuel & energy prices, which so far have not slowed the economy as much as in the past. Because stock market performance has remained tepid, investors have turned to real estate and bonds as places to put their money. Buying bonds helps keep longer term interest rates. That reinforces demand for real estate and also contributes to rising home prices. An emerging debate at the national level concerns whether a speculative bubble is forming in the national real estate market. In my opinion, the analysts are getting unnecessarily worried.
I believe it is the concept of theme and specialisation that will characterise the next generation of malls. For instance, Hong Kong has over the years, since Olympian City's opening, tried to bring in a lot creative ideas to the mall, with the gradual introduction of celebrities and activities. Every month there is something new – popular Asian celebrities' shows and events made their way through the mall, drawing ever increasing realtors across the world to investigate what all the fuss was about. They experimented with art festivals, encouraging local talent to display their creativity in a designated exhibition area with a different theme every month. And during the World Cup promotion, Olympian City's turnover increased a whopping 28 percent compared to the same period last year. Real Estate has also appreciated in Hong Kong with a variety of upscale developments. I feel any theme mall may not really work for a country like India, but as long as something is new and interesting, people will pay attention here. Similarly, in Singapore, the Funan IT mall is a place where all technology retails with its most beautiful and accessible consumer face. Info box five is a section that is gloriously touch, feel and retail merging into one. It represents the next generation of retail design and colour. Anything you want to buy, mix and match and accessorise in the technology space is at Funan.
Strangely Bangalore with its entire IT population cannot boast of a mall such as this. Is it because Singaporeans use and apply technology to their lives and daily living while Indians merely wait and follow the trend. Though the specialty mall trend has been started in the NCR for quite some time now, but so far the specialty mall was product specific like Jewellery Mall, Auto Mall or Factory Outlet Mall.
This is high time we look forward to the Gen Next malls, keeping the customer profile and need in mind, giving the value addition and customized solution. These Gen X malls should be larger than life, given the present scenario of huge entertainment component, and must be designed to be different from their smaller counterparts. They should offer better infrastructure, perhaps more economical rates per square feet, huge possibilities for cross-pollination between the enviably large retailer-mix that will exist in such a mall. In a nutshell, every retailer will want to be part of these big malls, which in turn will morph into a 'destination'.
Business would then be just a by-product of this experiment of success. For instance, we all know today in the cities it is easier to find a life partner than a place to get married, and many a planned celebration in the family suffer due to lack of space. So the concept of a Celebration City as a destination for the purpose is going to work wonders in the space starved cities of India. You will want to go there, actually would love to go there as a destination, emerging as a tourist hotspot too. Like Las Vegas' Caesar's Palace and Paris' Lafayette shopping center. A study conducted by Chesterton Meghraj says that these malls will be on the must-visit list of out-of-town visitors, and will provide the much-needed respite from a lack of entertainment options for the populace within the city. They will emerge as places to congregate and socialize in. However, contrary to the bleak future that has been predicted for the smaller malls in the media, the study points out that with the rise of these mega malls, the smaller malls, which are operational and doing great business today, are not going to disappear. They will fight for their survival. They will devise survival strategies that will help them stay afloat and not succumb to the possibility of extinction, which the big boys might inflict on them. Although there will be a lot of competition over the same concept in coming years, developers at this point of time should look forward to have the first movers advantage. Those who are on the right track will excel and there will always be competition, in any industry. If you don't have competition, it probably means you are not in an attractive business. So welcoming new challenges and learning to overcome them can only make the realtors and the industry at large better and more successful. REAL ESTATE PRIME DRIVER OF INCLUSIVE GROWTH
For instance, five years ago the entertainment industry which used to thrive on tier II and tier III cities, was finding the business nosediving in these cities. Pirated CDs, people watching movies at homes, there were problems galore. The prevailing mindset in the industry that elite audience in the metros doesn't go to theatres was making the situation even worse. Big cities and elite audience were seen as poor business proposition. What
the industry had then failed to realize was the fact that consumer preferences
were different in the metros. Therefore, when we built the first multiplex mall
in Vikaspuri, there had been skepticism in the market. Not any more. A multiplex
revolution in urban India has changed it all for Bollywood. And there is more
elite footfall in the metros than ever before. The great Indian Multiplex saga is not just about watching films in different ambience; rather, it is about a change in the kind of films we watch. A niche- appeal movie can fill up a theatre in a multiplex because most multiplexes have at least one hall with 200, may be fewer seats. Some films are made only for the multiplexes and, no wonder, from almost none a decade ago there are now 73 multiplexes across 15 Indian cities. India
seems to be the fastest growing market in the world for multiplex cinema and a
slowdown doesn't appear anywhere in the horizon. According to a study by the local
arm of audit and consulting firm PricewaterhouseCoopers, India currently has around
12,000 single-screen theatres and 325 multiplexes, and expects the number of multiplexes
to increase by 907 by 2011. The study also says that India's film industry was
worth Rs8,450 crore in terms of revenue in 2006, and could grow to Rs17,500 crore
by 2011. The
real estate developers across the country can take a heart from the fact that
though immensely popular, multiplexes constitute just 1% of the total number of
cinema halls, and 4-5% of the 12,900 screens in India. The industry is already
talking about the end of single screens. Single screens, with their low quality
ambience, would find it tough to survive in the long run, it is felt. This is
because there is a rising demand for quality cinema exhibition infrastructure.
Also, before long, digitisation will be the industry standard and exhibitors will
have to shift to it. As
per some estimates, India have only 12 screens per million population compared
to 117 screens per million in the US and more than 40 screens per million for
European countries. The risks involved are rising property prices. But most multiplex
owners have tied up properties for at least the next couple of years. Also, being
the anchor tenants in a mall, they are always offered special rates by developers.
Actually,
it is the retail boom that is mostly driving the multiplex story. Mall developers
all over the country are wooing multiplexes to occupy their top floors as anchor
tenants who would ensure footfalls. The arrival of the mall mania has actually
accelerated the growth of cineplexes as multiplexes are the anchor tenants in
most of malls. Initially,
we saw emergence of cinema multiplexes in Indian Metros and now this growth is
spreading to Tier II and III cities like Lucknow, Indore, Nasik, Aurangabad, Kanpur,
Amritsar and so on. Projects are under way in places like Kochi, Bhatinda, Coimbatore,
Kota, Madurai & Ambala. Towns and Cities with a population in excess of 10
lakh people is becoming lucrative for them. Some 40 cities in India are qualified
for that and given that are there lesser means of entertainment in these towns,
there is a huge potential. India is still an under-exhibited country-for a population of our size we have only around 12,000 single screens and around 300-350 multiplex screens. That leaves a large part of the country unserviced. We see a lot of growth in the sector, especially in the small cities. Again property prices in smaller town are comparatively stable, which makes real estate developers bullish on their plans for these cities. So, at least on the surface, there's nothing much to stop the multiplex boom.
Q.1
Considering the fantastic peaks scaled by the Indian stock markets in the year
2007, where do you see us going in 2008? ANSWER : In 2007, BSE Sensex delivered spectacular return of 47% led by strong GDP growth, impressive corporate performance & reversal in Fed cycle, which resulted in unprecedented foreign inflows (in excess of US$30bn). We believe 2008 will build on this healthy performance and markets are likely to deliver good returns.. Macroeconomic fundamentals are the key to the market performance in 2008. Going purely by fundamentals, Economy can grow at 8-8.5% in 2008 well supported by domestic consumption, infrastructure and private capex, stable interest rate scenario & good corporate performance.(driven by enhanced efficiency and operating leverage by Indian corporate).Having said that, unfavorable political events, rising inflation and rising crude oil and commodity prices may have adverse impact on growth in the short-term.
Q.2.
How have Birla Sun Life Insurance's funds performed in the last one-year, especially
the recently launched 100% equity fund - "Maximiser"? ANSWER : BSLI, in individual life ULIP plans, has 9 fund options with varying amounts of equity proportion. BSLI remains amongst the Top 3 performers across funds in the last one-year returns. Our Individual Magnifier fund (50-90% equity allocation category) has delivered 55.1% returns in last 12 months. Newly launched Individual Maximiser Fund (80-100% equity category) has delivered about 45% returns in the last 6 months. Our pure debt funds have delivered impressive double-digit returns compared to 6.9 % growth in Crisil Composite Bond Index in last 12 months. All the above-mentioned funds have outperformed their respective benchmarks. At BSLI, our endeavor is to deliver superior returns consistently over the long-term to our policyholders & our 2007 performance numbers validate the same. Q.3 . What about BSLI performace per annum as on December 31, 2007 ? Answer
: INDIVIDUAL Enhancer Magnifier Maximiser Q.3 What is your message to the ULIP policyholders? ANSWER
: In my opinion, The Long-term outlook of Indian economy is robust. ULIPs,
being a long-term product, automatically provide a shield against such short-term
market volatilities. Q. 4. What is your advice to investors : ANSWER
: While taking any investment decision, one should assess his/her risk appetite,
which is broadly a function of one's age, income, family dependents, other monetary
commitments, etc. Further, the investment should be done in consonance with the
investment objectives as a person's need for protection, investment and financial
liquidity changes over period of time. Market offers a plethora of investment
options like equities, fixed income instruments like bonds and bank deposits,
life insurance and mutual funds. All these options have different degrees of risks
& returns associated with them, with Equity having highest risk and return.
An ideal portfolio should have a judicious mix of all these instruments (either
conservative or aggressive depending upon the risk appetite). Broadly speaking,
investors' age can be used as a benchmark to determine the nature of the portfolio.
Generally, investors in the higher age bracket have a lower risk appetite and
vice-versa. Q. 5 . In the competitive market scenario what should your policyholders should do to maximise returns ? ANSWER : My advice to all the policyholders to take informed decision, follow disciplined approach (do not attempt to time the market) and do not venture directly into the equity markets without market knowledge. It would be prudent to let professionals/experts manage their money, which would render higher degree of safety to their investments. In this light, ULIPs become an attractive option since it not only satisfies one's need of investments along with protection but also makes one follow a systematic investment approach and offers a well diversified investment option which helps to defuse risk over a longer period. Q 4 .What is your message to netizens regarding BSLI performance throughout years ? ANSWER
: Birla Sun Life Insurance (BSLI) in its 6 successful years of operations
has contributed significantly to the growth and development of the life insurance
industry in India. It pioneered the launch of Unit Linked Life Insurance plans
amongst the private players in India. It was the first player in the industry
to sell its policies through the Bancassurance route and through the Internet.
It was the first private sector player to introduce a pure Term plan in the Indian
market. This was supported by sales practices, which brought a degree of transparency
that was entirely new to the market. The process of getting sales illustrations
signed by customers, offering a free look period on all policies, which are now
industry standards were introduced by BSLI. Being a customer centric company,
BSLI has invested heavily in technology to build world class processing capabilities.
BSLI has covered more than a million lives since inception and its customer base
is spread across more than 1500 towns and cities in India. All this has assisted
the company in cementing its place amongst the leaders in the industry in terms
of new business premium income. The company has a capital base of Rs.1000 crores
as of 3rd December 2007.
ANSWER : The Aditya Birla Group is a US $24 billion conglomerate with a market capitalization of US $31.5 billion (as on December 31 , 2007) and is one of the largest business houses in India. It enjoys a leadership position in all the sectors in which it operates. It is anchored by a force of 100,000 employees, belonging to 25 nationalities. Its operations span 20 countries across six continents and is reckoned as India's first multinational corporation. Headquartered in Mumbai, India, over 50 per cent of the Group's revenues flow from our overseas operations. The Group nurtures a work culture where success is built on learning and innovation.It is a leading international financial services organization providing a diverse range of wealth accumulation and protection products and services to individuals and corporate customers. Tracing its roots back to 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31st, 2007, the Sun Life Financial group of companies had total assets under management of US$386.82 billion. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol "SLF".
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Exhibition Management WLL
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Transparency
in the banking structure has been a major issue in the past. Reserve Bank Of India
has taken some major initiatives to bring clarity in the present regime. The latest
change has been the introduction of Base Rate system with effect from July 1 ,
2010. This new change in the system of lending will have a widespread effect on
anybody operating in the economy. The base rates will go on floor and banks will
have to decide their actual lending rates using the base rate as a reference.
The decision of the Reserve Bank of India (RBI) to change from the Benchmark Prime
Lending Rate (BPLR) system to Base Rate system comes from the failure of BPLR
system to improve transparency in the lending rates charged by the banks, says
Mr Deepak Dayal, Managing Partner , Dayal Legal Associates, in his exclusive
report.
IT
is no longer enough to be good at ones job . One needs to be better than the best
and more competitive. Obviously, value addition to ones skills is imperative to
do so which not only helps stay on the ball but also helps manage work profile
in such a way that one can climb up the ladder faster than others. This applies
in verbatim to Mr Raju Jaddoo, Managing Director, Board of Investment (Mauritius).
Mr Jaddoo spoke at length to N P Sinha. Editor, Thesynergyonline.com, in an exclusive
telephonic interview on growth strategy and identified key sectors to achieve
double-digit growth in 5 to 8 years starting from 8 percent GDP growth in the
next fiscal year.
RECENTLY
in the wake of a sting of bad press, a large corporate house handed over its
crisis management to the PR agency which suggested the exclusive social media
solutions, since the target audience has been net savvy. This made me introspect
as to whether the social media is fast taking over the prime time or there is
a strategic PR dilemma which is leading to over reliance on this new age medium.
THE
recent reports in a section of media regarding the malpractices in the deemed
medical universities is something that I would personally like to condemn. However,
what has compelled me to react publicly is that the role of the Medical Council
of India (MCI) is unnecessarily being dragged into this controversy. As the president
of the MCI, I would like to make it clear that the MCI has no role in monitoring
the admissions or determining the fee in the private colleges.
THE
real estate sector in India, like worldwide, is reeling under liquidity crunch
borne out of overall economic slowdown, increasing debt & lowering demand
and an over cautious lending institutions. However, the realty sector in India
has weathered many a storm in the last one decade during its course to the infrastructure
development of the country. I have no doubts that the industry will come out more
robust and mature once the market sentiments improve. But to keep the show going
in times of slowdown has been a tough challenge in the last almost a year now.
ON
the eve of Hindustan Times Leadership Summit in New Delhi, a foreign delegate
was found curious to know why is it so that despite phenomenal growth in the Indian
realty sector, there appears to be a crisis of leadership in the industry. Well,
that may be something unpleasant to us, but the fact remains that in this hour
of crisis before the industry, this pertinent issue assumes even greater significance.
RAJEEV
Chandrasekhar, MP from Bengaluru and FICCI President has in a letter to the Prime
Minister urged the need to have an open market- based method to establish value
of Spectrum that the government from time to time gives to the private sector
for operating various services so that the exchequer does not lose out.
STEEL
and cement prices have hit the roof again and real estate developers find themselves
in a difficult situation. The construction and infrastructure sector is feeling
the heat of rising steel costs. Steel and cement contributes about 33 per cent
of the total cost of a construction project. The elevated price of steel and cement
are escalating the construction cost but are they affecting the real estate companies?
The Managing Director of Best Group of companies, Harjeet
Singh Arora, spoke in this regard further to Thesynergyonline Correspondent in
an exclusive interview .
DESPITE
being the second most populated country in the world the per capita usage of Stainless
Steel in India is very low (about l kg per capita) in comparison to China ( above
4Kg per Capita). This is despite the fact that Stainless Steel is not elitist
in India and here lies the paradox, says
Mr. Yatinder Suri , Country Head, Outokumpu India , in an exclusive interview
with Thesynergyonline Correspondent. 
"Birla
Sun L ife Insurance Fund performance amongst the best in the industry"
, expresses Mr Vikram Kotak, Chief Investment Officer, BSLI, in an exclusive
interview with the Thesynergyonline Correspondent . 
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