Presidential Prescrition - An over reach of Press

In a leader in "The Hindu" today, a heavy dose of prescription is handed over to the Presidential nominee.

This presidential election from the start has been a controversial one. To a very large extent it reflects the mindset of the politicians on the purported fluid political situation. The ground reality is different. It is therefore unbecoming of leading news papers to further disillusion the ruling class by prescribing restraint when there is no cause of a provocation. The opposition is fragmented and no one, even the worst enemy of the congress will like to rock the boat now.

Coming to the prescription itself and the instances quoted in the history based on which such prescriptions are handed over, it is to be said that times are changing and the same Victorian approach may not be what the doctor will order. The media is only partly free and excessive restraints at the wrong time on the part of the President may not be advised.

One needs to allow the incumbent to act and have faith in her advisers and the other administrators of the constitution of India. In our 57 years of Republic, except for a brief period in 1975, our independence was never at risk. We managed to come out of that crisis as well.

I would strongly argue for an active President of India, whose actions will of course have to be within the powers granted by the constitution. While restraint and private reprimand in some cases may produce extraordinary results, it must be left to the judgment of the first person to choose the option.

One stop solution as indicated in the Leader is not what the doctor will order

The Leader is Looking Ahead .

SEZ Policy

SEZ policy which was supposed to be a single stop solution for all the ills of the exporters has hit a road block much to the chagrin of some in the government. The issue is the land which in most of cases is snatched from small farmers and handed over to the industrialists & corporates. Our rural folk have skill sets which support agriculture and it is naive to expect that reclassification of Land use which effectively rules out the repossession of the land by the current owners for generations will be smooth. Further the literacy level and the language barriers prohibit these farmers to move on to another location in our own country with out major setback. Policy makers and corporates should be humane enough to understand these issues and take appropriate action.

For instance in the case of Reliance, one of the suggestions is to take these farmers on contract basis and provide them with leased land and need based funds to engage in farming. Such farm output could be sold through their own proposed retail network. Such forward thinking and inclusive development models should be deployed by the corporate leaders like Reliance.

The Need for Talent to multiply Talent

The Need for the Talented to Multiply Talent

In the Indian context not a day passes with out a mention of the looming talent crisis to be faced by the IT and ITES sector. A shortage of similar magnitude is increasingly being felt by the brick and mortar industry, in infrastructure projects, Neither the Services segment is spared, as is seen in the shortage of qualified accountants. We are recruiting at third year level (two years prior to graduation) and the trend may continue.

What is needed is a multi pronged approach to tackle the problem on an immediate basis.

Education being a concurrent subject, has now become every government’s (state and central) problem. As is always the case under such circumstances every decision maker has come with up quick fix short term stand alone solutions with out a clear cut approach to prepare talent which are recognized at the state and national level as well as the international level. One wonders whether the decision makers at the education departments are aware of the need to nurture talent and provide enough opportunities for them to develop. While it is impossible to alter the basic structure of decision-making and governance, we need to start to address the issue.

The best way to start is by appointing a Central Education Regulator supplemented by state Education regulators. The Education Regulator functions and powers shall be structured in a similar manner as is done for the other industry like the Telecom. Today most of the institutions in the private sector are being run as an enterprise with clear responsibility to the promoters rather than to the student. Such undertakings need to be regulated and a quasi-judicial body needs to be constituted to streamline their operations on an immediate basis.

The regulator shall at the policy level lay down the following guidelines:

· Uniform Syllabus across states from the Higher secondary School onwards(8th Standard onwards),

· Lay down the principle of selection of teachers and their appointment, including fixing their service conditions.

· Fix Student – teacher ratios for each level

· Define minimum infrastructure requirements for each type of curriculum

· Define evaluation procedure

· Evaluate new specialization avenues and through the support of expert bodies and consultants formulate structured courses for new avenues.

· Specify minimum funding requirements

· Bring in a system of transparent accounting and acceptable maximum norms of return on the investment, Debt - equity norms and other investment guidelines to encourage Public Private partnership.

At the implementation level regulators role will be supported by multiple organisations and it is therefore necessary to appoint State Regulators. The state regulators in addition to laying all policy framework for the primary education, will be responsible for the implementation of the Central Regualtor's policies with in the defined state geographical boundaries.

The central regulator as an overseer of the implementation shall

· Introduce Licenses and certification mechanisms to ensure orderly implementation of its policies

· Shall establish transparently educational fees to be paid by the public at large

· Shall regulate the pricing of the educational materials which are consumed by public at large

· Establish cross subsidy norms and generate funds for rural education utilising the premiums now being paid at the Metro level through a transparent mechanism.

· Regulate coaching centers and monitor them.

· Regulate Mid day meal scheme

· Regulate student concessions

· Intervene in any area of concern (such as Vehicular Transportation for Children) which affect the student or the teaching community at large

· Adjudicate on issues related to examination are recruitment

As is clearly seen above there are various agencies either attempting to regulate these issues and in some of the cases the issues are not addressed at all. Providing such an encompassing role for the regulator could be contested by many, it is necessary to understand that unless all these issues are addressed it will be impossible to move quickly forward.

The main fall out of such a transparent regulatory policy frame work will be to encourage private investment. If our software companies are hesitant to invest in large scale in education, it is because of the need for themselves to collate data on the institutions. Further they need to supervise the implementation themselves and that requires a lot of responsibility which is outside their core competencies. No wonder there are so many crying over issues in the educational system with out doing anything about it.

Taxation Policy of the government and the credit policy shall be structured to encourage investment by corporates in to the certified institutions. At the personnel level outright allowance of say Rs. 1 lac per individual as set of in the taxable income from the salaried class will see the investments rushing in to the system. There are many a professional who will be willing to invest directly given this additional incentive.

e Learing which is a nascent phenomena needs to be encouraged. Innovative mechanisms shall be thought of to use such as utilising the off peak bandwidth available with leading service providers to deliver content to remotest areas of the country.

Across sectors Indians have proven their mettle and will definitely look at an opportunity to spend more time in India and invest their talent and resources. Persons in the educational field especially, given their typically strong religious leaning, will not waste an opportunity to return. But they will return only if the climate is right and the overall environment is conducive to investment and nurturing of talent, their own, their peers and the new stock.

India is currently uniquely poised to leverage its position in the Knowledge based industry. There are many diverse issues starting from the robust all round performance of our own economy, a renewed interest in the Indian market by our own Diaspora, the crashing of the distances and increased globalisation, etc which have created an opportunity for the government to seize the moment and provide the frame work to the talented to multiply talent.

Last but not the least, the talented Indian Diaspora is aware of the increased inequalities that are getting created in the western world, which are solely attributable to their talent. If it were to boil over it is any body's guess, who will be the first affected and no body can pretend to be not aware of the such a situation developing.

Disinvestment a different Perspective

All the assets which are currently considered as Navaratnas have reached that status due to the protection they enjoyed during the start up stage through various tariff protection measures and in some cases by denial of permission to create additional competing capacities by governments diktat. It is therefore not wrong to say that these assets are created through Regulation efforts and not necessarily through the enterprise efforts of the government. Such being the case, it is but obvious that the ownership will have to be transferred to the public who has basically suffered to create this asset. One cannot wait generations to reap the benefit.

It will be therefore appropriate to offload the Navartna equity to individual citizens who have suffered to build these capacities and have the first moral lien on these assets. So the return of the equity to the public cannot be considered as "Dis Investment". By this process funds are garnered for creating similar assets, which over a period of time can again be returned to citizens thereby creating a value creation. In appropriate naming has vitiated the entire process of returning the assets to the true holders.

Automatic Meter Reading Solutions

The caption is misleading as the author is actually in favour of locating Mega Power Projects along coastal basis. His main concern is water and hence he prefers coastal based power plants.

Given the current Power deficit in India we need to have many more of these Mega Power Projects to provide even a single lamp connection to many of our citizens' households. While the Distributed generation modules will survive in a grid backed up by good base load generating capacity, the model will fail miserably in our country where we have severe shortages.

Mega projects bring with it scale of operation and high level of automation and latest technology. If we have to achieve 4000 MW of generating capacity even by 3 to 4 plants as suggested by the author we will add up a minimum of 3 times the labour force required to operate a 4000 MW power plant. And that is sheer waste and even in a populous country like ours we are running short of qualified staff today.

It is therefore in the interest of the nation that power professionals appreciate the need to bridge the gap quickly and work for it.

Ultra Mega Power Projects - A great Idea for the Indian Power Sector

The caption is misleading as the author is actually in favour of locating Mega Power Projects along coastal basis. His main concern is water and hence he prefers coastal based power plants.

Given the current Power deficit in India we need to have many more of these Mega Power Projects to provide even a single lamp connection to many of our citizens' households. While the Distributed generation modules will survive in a grid backed up by good base load generating capacity, the model will fail miserably in our country where we have severe shortages.

Mega projects bring with it scale of operation and high level of automation and latest technology. If we have to achieve 4000 MW of generating capacity even by 3 to 4 plants as suggested by the author we will add up a minimum of 3 times the labour force required to operate a 4000 MW power plant. And that is sheer waste and even in a populous country like ours we are running short of qualified staff today.

It is therefore in the interest of the nation that power professionals appreciate the need to bridge the gap quickly and work for it.

Irrelevance of Inflation Targetting

In spite of phenomenal increases in the basic prices of Metals and Oil, which we import to run our economy, our economy is ticking and moving forward reporting marginal increase in inflation rate. This shows that we have found a way to scale up volumes and efficiency. We are also increasingly shedding cost plus factors, as is evident in air travel and communication costs which are no longer operating on social basis but are driven by market forces and hence competitive. I still remember the news stories, (similar to the ones which we are seeing in Oil sector today), that Indian Airlines request for revisions are not decided by the government and hence the Airlines is likely to report losses!

Therefore monetary policies should factor in structural changes and encourage on a sustained basis the attempt to bring an impetus to growth. We are at this stage a unique economy where our knowledge workers are gaining recognition and bringing in large profits which are retained in the nation. Consumption is increasing and goods are being delivered to meet the demand. Sustained corporate earnings growth across sectors is aided in no small measure by volume growth.

So we need to have our own policies, which in this case may even call for increased deficit financing or using the forex reserves. We need to therefore find the way to sustain this growth through monetary policy and be very cautious in our moves lest, this momentum gained over ten years of 5 year planning is challenged.

Economic Renaissance in the Developed World

Economic Renaissance is sustainable and the Developed world is looking up to India to bolster their economy through the improved performance of our economy and increased consumption. Just to illustrate - Today our earnings in foreign exchange is across a much wider spectrum as compared to a decade ago. While there used to be only remittances from sweat labour from across the middle east and supporting funds from non resident residents to the near and dear ones, today Indian born and international entrepreneurs are returning to their mother land with ideas, systems and seed capital. This is setting in a new chain of growth which will take our economy to new levels, leave alone sustain. Their presence and their interactions with the world clearly demonstrate the sustainability of the growth story, for these are definitely not "Fair weather Friends".

True any mismanagement of the macro economy can undo part of the growth story. But the current government has not given any indication of such actions. On the contrary, the government owned Goliath the Indian Railways has returned surplus and is set to surpass its own stellar performance last year. The investment in the aviation sector is returning surplus as well.

The capacity addition being seen in the Capital goods industry, the booming service sector and the additional investment being planned for in the Retail, Infrastructure through Public Private participation, indicate that the Indian corporate and international private fund managers have a diametrically opposite perception from that of IMF. They believe in the Indian growth story and are eager to participate at the first opportunity, rather than wait and be left behind.

Retailing in India - New Revolution

With the who is who of Indian corporate announcing ambitious schemes for the retail space, it is indeed a question how the neighbourhood small retailer will manage to retain his own. Grandma's wisdom suggests that the small retailer will continue to staty. Is that the case?

Let us look at similarities in few other major retail spaces - the eateries, the road side mechanics for 2 wheelers.

I remember the early 80s when we had very little choice in class restaurants in Chennai. As a matter of fact if you move out of one part of town, you are literally on your own or you will have to be dependant on the small road side restaurant, with its basic facilities. But today, we have choices and this has not reduced the number of small eateries; on the contrary the small eateries have also increased in numbers.

Similarly we were wholly dependant on the road side mechanics but now we have a choice for the place of service; but that has not eliminated the road side mechanics, but has only added in numbers.

The main reason for easy accommodation of the variety of service providers is the latent demand which has not been met, be it in terms of quality or quantity or infrastructure the service provider offers. Similarly in the retail space there are people who are looking for shopping in large Retail chain stores, which they can not do so now. When such an opportunity arises they will definitely shift. But that would not mean that the entire lot who are shopping with the neighbourhood retailer will shift. There will be pressure on the local small timer to improve and attract new customers, retain existing ones. So will be the case for the Super Bazzars;

The key differentiator between the big and small will be Technology. This will play an edge as it can be leveraged to assure consistent quality in all aspects. Indian consumer is very demanding as many marketing surveys has established and the big ones are aware of it. So if they provide quality products and service they will have their own space and will manage to wean away a larger segment. But they can never dream of eliminating the small retailer.

Indians are masters in retailing and will put the large international logistics firms and whole sellers to shame by their rudimentary solutions, as in the case of the panwallahs. These road side delivery centers are are so excellently linked through out India by a supply chain mechanism, which even the giants such as HLL have not been able to replicate after years of attempts. The pan (beatle leaf)is fresh and so is the gulkand! And please note this chain works with out proper refrigerated storage and refrigerated handling vehicles.

As on today the small retailer who is threatened by the big bazars like Food world are slowly transforming themselves. One group whom I am observing, has improved his personalised service and has started accepting cheque payments! Assisted by the local telecom service provider, he accepts orders through intercoms from nearby flats who are all connected to the same service provider and have availed of the group dialling facility! The small retailers are fearsomely innovative and the wal marts should remember their German fiasco when they enter India

NTPC as an Investor in TELK

It is heartening to note that NTPC is considering picking up 49% of the equity in TELK. For all professionals in the Power Sector this is good news, for we are at least sure that TELK will definitely not go the NGEF way.

The report also hints at TELK facility being used for repairing the failed Transformers and other equipment of NTPC . This adds a jarring note. As an investor one can not fault NTPC for negotiating a deal most suited for their needs. But one would expect a more proactive role from NTPC, in the interest of their own share holders.

TELK, as a manufacturer of Generator Transformers has a unique position in the country. On last count their Transformers were supporting more than 25000 MW of generating capacity in the country be it Nuclear or Thermal or Hydro Electric Projects. The performance of their units have also been by and large satisfactory. Given this back ground and the current boom in the market with so much of accelerated investment flowing in the Generation and Transmission segment, NTPC as an investor should immediately ensure maximisation of the capacity utilisation by providing working capital funds. Price realisations in the Transformer industry has gone up with existing capacities being utilised fully. Even Chinese vendors are picking up orders in the Indian market.

Today when multinational Power companies such as Siemens, ABB & AREVA are investing in the India for establishment of green field capacity or expansion of their existing capacity, it will be indeed sad, if the existing capacity of a leading indigenous manufacturer is turned in to repair facility.

NTPC's Merchant Power Plants

It is heartening to note that NTPC plans to quickly strengthen their balance sheet using the Merchant Plant route. These plants when they come on to the Grid, a National Power Exchange will be functional as envisaged by CERC. In the Draft paper on Power exchange published by CERC, the Prices are to be discovered using the Double side Bidding process where, the aggregated demand at different prices is matched with Supply Prices quoted by Power Producers, for different quantum. Such a system as the paper very correctly points out, will minimise market manipulations, by providing equal say to both the Buyers and Sellers. It is therefore expected that the tariff of the Merchant Plants of NTPC will be discovered through such transparent Double Side bidding process and not determined by the penal rates of Unscheduled Interchange which it seems is their current expectation.

Another factor which one needs to keep in mind is that these Merchant Plants are planned on the balance sheet of NTPC and NTPC assets are built by all the Distribution companies and the erstwhile electricity Boards. It is but natural that the Distribution licensee (or Electricity Boards) while willing to accommodate certain level of competition(read higher prices), expect that the prices are either discovered through the Power Exchange in a transparent manner or guided by the well founded tariff setting principles, including the competitive route. This is especially applicable for the large Hydro stations which are being named as Merchant Plants, where the benefit of lower tariff should not be blocked to all the stake holders, in the interest of one company.

Disgorgement Order of SEBI

Whether it is the "Disgorgement Order" or the move to accept and recognise the offer of "Super Self Regulatory Organisations" of a section of the market participants, SEBI's initiative have to be complemented and encouraged. The man at the helm Sri M.Damodaran deserves all the praise he is rightfully receiving..

His recent remarks that "Absence of Precedence would not be a deterrent for the Regulator" as quoted in your column deserves to be singled out and appreciated. India is unique and is today a thriving financial market where the psychology and the behavioural aspects of the market participants are strikingly different than those of the other developed economies. The lax in non compliance to the laws of the land (read - feeling we can manage it all) be it a simple a traffic rule or the tax compliance, emboldens the individual to use his capabilities to influence.

He comes with this mind set to the market, which the Regulator has to take note of. Regulators actions will therefore need to be punitive and swift to change this mind set. The over reach of the regulator in commenting on the media is another case where he is moving on to ensure investors protection. Regulators actions are crucial as his dithering can shake up investors confidence and scare away the fair weather friends.

Increasing appetitie for Investments in Indian Power Sector

With the "Electrifying Start" achieved in the implementation of Ultra Mega Power Projects, it is clear that the present policy initiatives has met with more than anticipated response. This is a land mark event in the country and will clearly be remembered for times to come.

Two significant changes have been heralded in this start. One; it is now clear that there is an enormous appetite for investments in the Power Generation Segment. Given the mind set of some in the government who still complain of lack of response of the Private sector in participating in the addition of more than 120,000 MW of Power Generation, the current response of Indian Companies with the support of the international equipment manufacturers and investment agencies, should be satisfying.

Power sector is unique with its own typical issues. It cannot be compared to Automobile Industry (as done by a senior government official in a conference recently) for the Dealers in the Power Sector decide what the consumers get and not the Consumers or the Producers.. The freedom the consumer enjoys in choosing the Automobile he wants, whether it is the class or brand, it comes to Power, the same consumers do not have the luxury of choosing between a Maruti or Tata or Honda, even for a given segment. He has to live with the dealer with whom he is connected or generate on his own. In the other industry Dealers have a limited role and the market is governed by consumer demands and the Suppliers capabilities. To add to the trouble, in India the "Power Dealer" (Distribution Licensee / Board) can simply report that he has lost 60% of the goods delivered to him! Can a dealer in Cement or Automobile report a similar loss and still continue to be in Business?

Given this scenario where the Producers cannot choose consumers, it is necessary for the government intervention to guarantee returns on investment or provide policy initiatives where the investor will be able to recover his investments and see guaranteed returns. When such micro management takes place, then the prices are artificial and are not typically governed by Free market dynamics. And the prices tend to be higher when the Public sector takes the major role as being in house, the Prices are not put through hard negotiation. It is therefore to the Credit of the persons at the helm of Ministry of Power (MoP) for introducing a high degree of competition and bringing in an era of Ultra Low Prices.

The Second important change that this Start will bring in is a significant improvement in Public Sector Operations in this sector. With this policy initiative the Generator is given the option of integrating two distinct elements in the value chain namely mining and Power Generation. The price now received is stripped of the high cost on both these counts. NTPC which had teamed up with BHEL for equipments has quoted a price in excess of Rs.2.00 per unit while three Private sector Companies have submitted offer less than Rs.1.40. To understand the magnitude of the impact one needs to work out the additional cash flow which NTPC tariff would have generated in the 25 year life cycle of the plant. Taking an average PLF(Plant Load Factor) of 80% with 8000 hrs of annual operation, the amount is Rs 45000 Crores for 4000MW. Some would argue that "that is the kind of inefficiency which the country is bearing today".

The equipment maker BHEL has to review the cost of his operations as he is no longer operating in a protected environment. NTPC, should sharpen its skills on mining and also negotiate finer rates of finance. I am sure there will be lots of introspection in these companies and there future actions will factor in these market dynamics.

All of this euphoria will quickly disappear if the planned evacuation arrangement (over which the Generating companies do not have any control) do not come up in time. With the MoP planning to do a similar act in the Transmission segment, part of this issue will be addressed. Focused initiatives are needed to strengthen the sub transmission segment as well.

The MoP literally talked down the Prices in this bidding round, when they indicated that their expectation of the Price for Sasan power should be in the region of Rs.1.50 to Rs. 1.60 per unit; a reserve price of sort. Any serious player would not have quoted more than that and the results bear this out. It is of course another thing that the government corporations which derive the maximum support from the MoP do not seem to concur with this view!

With such significant changes the Indian consumer can clearly look forward to an illuminated future.

Free the Pipe and avoid Monopoly

We have a lot to learn from the Electricity Distribution model when we are on the anvil of launching a pan India network of Pipes for gas with the last mile connectivity to deliver to individual homes. Four major points emerge from the success as well as the failure of the National Power network. These are:

1. National Grid is best owned by a single operator who can not have distribution rights at the local level. This is to ensure that the pipes are not monopolised, which link gas wells and LNG terminals at port to City Bulk storage points, and bulk consumers. GAIL has to be given the mandate and the Gas Transmission tariff should be regulated. As in the case of the Power sector where Private participants invest in the formation of major national links, the Joint venture route with GAIL ownership up to 49 % shall be insisted up on.
   
2. City Distribution shall be sub divided to two segments - the main trunks which run across the city and the sub transmission which connect the trunks to individual consumers. We must avoid the model which we have in electricity, where when we are in the fourth year of reforms and are unable to free the wires for open access. It is therefore necessary to allocate city distribution to a minimum of three players for each city through a competitive bidding route as done in the telecom sector. The selected operator shall be mandated to build the minimum quantum of the Main trunk routes and the sub transmission network as required for servicing his consumers. The main trunks should be free to be used by the other Gas Providers by paying the transmission charge which can be regulated. While individual consumers cannot have the choice at this stage, this kind of structure will finally enable the pipe assets to be spun of to a separate company which may not have interest in distribution.
3. Metering has to be state of the art, along with the connected remote control mechanisms. This would facilitate dynamic pricing to reflect the global price trends and the foreign exchange rates. We need to encourage Pre Paid metering which would facilitate the consumers to move from the Cylinder era to the Piped era, with out complaining of high energy bills.
   
4. Finally Energy in India is subsidised and moving over to market related pricing quickly can enlarge the social disparities. It is therefore prudent to plan the network reckoning some element of subsidy which can be clearly traced to the beneficiary instead of "un metered Freebies" now being practised in the electricity sector.

Monetary Policy

Central Bankers prime responsibility is to utilise the Monetary Policy to achieve Monetary stability over long periods under varying conditions. This as the author has indicated, predominantly relate to maintaining the Purchasing Power of a currency. But there are two other significant elements which need to be balanced;

- One the competitiveness of the export basket should not deteriorate and the other
- the main stay of the people be it industrial wages or the value of agriculture produce should be stable.

While some may tend to ignore the comparison of Gold to purchase power, as to be too elitist, the situation of the Indian farmer or the wages of our semi skilled worker will throw a definitive view. It will be too simplistic to assume that all these can be achieved only by the Monetary policy. But monetary policy can substantially support these, as in the case of USA where the Asian economies surpluses are funding the subsidy of the USA farmers(Budgetary deficit). Not many states will be able to practise this. The decision of the US central bankers to believe in their systems and make their currency fully convertible in an era of where everything was closed has brought them this reward. It is always the first mover who will have the advantage as it is evident here.

Given this background, it is necessary for the central banker to come up with innovative mechanisms and steps, structured to capitalise on the individual country's strength. We have today put in place sound controls which can be relied up on. So it is time to take bold steps which are unique to our country's strengths. Two starking uniqueness are evident

One - Our huge retail stock of gold(should say hoard) No other country has so many of their citizens hoarding gold. This immense asset is not put to use. This has to be done.

Second - Our Youth. We are one of the two countries who will have the largest number of youth in the next decade, whose services will be in dire need amongst the so called developed nations as well. We need to formulate policies, to retain this youth in our country to levergae thier earnings.

India is poised to move in to another era and path breaking efforts are needed to take to Her to the rightful place She deserves.

Merchant Power

As envisaged by the Power Ministry 15000 MW of Generation capacity is expected to be added to the grid through the Merchant Power Plant route. This is a bold new concept to channelise private investment in to the sector.

The Indian Power sector needs lots of reforms and each step has its own detractors. 40 to 50 % of the Power injected in to the system is not billed in some states and hence substantial costs are not recovered In a such a scenario, the utilities obviously manage load peaks by severe load shedding, which is accepted as a norm. The industries are therefore forced to have their own stand by generators which are in some cases operated as base stations. This brings a very high cost to the industries. So over the years major power consumers have been forced to invest in Captive Power plants that is base stations planned on coal instead of relying on grid power.

Under these circumstances, one can definitely expect good response to the scheme for setting up of Merchant Power Plants. A lot remains to be done to make this a success. As the author has correctly pointed out Transmission network needs to be strengthened and more private or public investment made in this segment. Existing large Private Power utilities like Tata Power and Reliance Energy will definitely utilise this opportunity as the tariff of the power generated through the Merchant Plant route is not regulated. Both the pit head plant with the Coal Block allocated to it and the plant with the coal linkages will be keenly contested as the industry today is generating cash surpluses to have its power requirements met through its own investment.

Control Notes Supply

The constant increase in Printed Notes Supply and the excess requirement of working capital due to processes and legacy issues are two significant elements which need to be tackled head on to rein in inflation. The slack money which is in the system as working capital in form of credit at various stages is increasingly pushing up the cost to the consumer and sucking in more credit for achieving the same output. An alternative will be to incentivise use of money for shorter periods. This has to be through a policy initiative and will signal better management of working capital limits.

Given the fact that most of the receivables are linked to central & state governments the finance ministry will do well to seek a review of the Outstanding payments; the Government's "Sundry Creditors List" and devising methods to settle the same with in reasonable limits. Even for approved plan outlays, payments are with held or not released, as either the funds are diverted for meeting out salary payments (as in the case of state implemented projects with central funds) or stuck due to terms of contract an euphemism for dithering. This needs to be addressed immediately with the accelerated growth seen in the recent years.

Cash transactions have again not been controlled as the key contributor is Real Estate whose administration is the responsibility of the Center and state. A pragmatic to capture the true Real Estate values and make it attractive to comply with completing transactions closer to realistic values needs to be put in place.

Currency rate Instability

One of the reasons the interest rates do not impact the Real estate asset class is because of the simple fact that it is running on money which is PARALLEL. No individual or HNI can borrow through the official channel to buy a land in any city. It may not even cover 5 % of the cost. That being the case to signal control of this asset class through monetary instruments, as you have very simply and eloquently argued is shooting your self in the legs and yes both of them.

Lack of agricultural growth and its impact on the growing economy has been ignored by the government even though the central banker has been highlighting its failure on this account. In the election year this becomes a much more bigger problem.

Importing essentials, while being a short term measure, to cover the ground to arrest inflation, long term bilateral international agreements (like the ones being done for energy Security) can be negotiated for essentials to cover a planned period before our internal agricultural production escalates.

We need to think out of box to come up with solutions which are specific to us and the way in which we allow our parallel economy to grow and accept inefficiency.

Process Reengineering

One of the main concern which is agitating the corporate minds across sectors as emerging from the articles in "Budget Line" is the government's attitude and attempt to micromanage issues instead of staying aloof. There is open cry to go for a thorough Process Re engineering.

If Mr. Ravi uppal, is agitated about "C" form, Deemed Export and VAT issues, and raises it as a point for discussion in a public forum, one must realise the impact that is having on the performance of major organisations. All the major players in the industry know that physical part of any business transactions gets completed quickly; but the corresponding statutory complaisance's take years to close. Obviously any prudent organisation, would like to look at the possible liabilities on these counts and address or provide for. It is time that Government addresses these issues and does a thorough review of the process and overhauls it.

Another anguish which is emerging again across sectors is the lack of commitment for the implementation schedule from government. In a scenario where the government identifies a project and provides funds, the implementation wing should achieve scheduled completion. But instances where this happen as in the case of Delhi Metro are less. The lack of commitment on the part of a few of the implementation in the wings of the government could derail the whole project. May be the government should outsource implementation!

5 Points Overlooked by FM

The article Five points someone overlooked made for an interesting reading. I believe that the FM gave each of these five proposals a due thought and rejected it. And here is why?

1. Excise Duty on cars: Passenger car segment has seen an overall growth of 23 % on the previous year and that too on a year when they have seen their input costs escalate. Across the sector they have reported healthy earnings and the sector is exiting enough to attract major players with the existing duty structure. So why reduce and loose revenue?
2. Focus on Tourism Infrastructure: The hotel industry was not waiting for a 5 year tax holiday to launch new projects. They are waiting because of the more than 80 clearances which they have to take from governmental organisations starting from Central to state government departments, to corporations to local police. If it is a high rise building you need a clearance from the Aviation department and if you are on an important road the Highways! Clear these hurdles and increase taxes. You will still not be able to discourage investors rushing in. The average room tariff of our hotels is after all comparable with the some of the costliest in the world!
3. Duty Structure on Petroleum Products: The case here is driven by the need to generate enough revenue for a rainy day. Imagine a situation when the Oil price stays stable at US $ 75 per barrel or above. The impact on our economy will be severe; may be the FM thought it prudent to pass on further cuts at that time! The real cut in this sector should come from states who never are convinced about it. May be we have to wait for the GST for an overall taxes reform in this sector.
4. Promoting savings: I do not agree that this has been missed out in the budget though the author may have his reservations as to the extent. tax deductions on Premium paid on Medical Insurance has been increased and the interest costs paid on educational loan taken for one's spouse and Children are tax deductible. Satisfying enough for a middle class person.
   
5. Abolishing DDT for Holding companies: This wish, I tend to compare with the wish for reduction in taxes on tobacco. Holding companies are vehicles which serve to enrich the investors and work around the regulatory, taxes network. To reduce taxes for such Holding companies will translate to encouraging their breed. Let us encourage more transparency and may be increase the taxes for these companies.

Funding Higher Education

IIT Chennai, with a funding of Rs. 100 crores for 5000 students and 400 teachers is one of the key factors that make this institution a great success. The other factor as the Open Page article "IIT Models have to be replicated" in The Hindu today correctly argues is the total autonomy.

As one of the strategists at a recent exchange of ideas in Yale University sessions (I was lucky to hear through a podcast) mentioned it is the Autonomous status of the universities of USA which gives it the cutting edge in innovation. The panelist went to the extent of arguing that this is one of the key factors which make the USA super power; you destroy this autonomy and USA may loose its special status as the lone Super Power.

We have two great advantages. We are a living democracy and we have the demography in our favour. India Inc or the governments or the Alumini of these institutions must wake up to this fundamental reality and initiate urgent steps to release the second tier institutions from excessive controls.

India Inc on Job Training & Stipend

I read an interesting article in Business Line today on the topic "India Inc Offers Job Training, Stipend".

Two significant facts hit me. One the minuscule number of students who will be eligible for this offer and the other the absence of scholarships for the Science and accounts faculties. The total population who will be eligible for this offer is in the range of more than 3 crores and to see that only 5000 will become eligible, even though it is a starter is real dampener.

One would expect the CEO's of India Inc to exhibit a better sense of the numbers involved and scale up the offers to make a significant and quick impact.

Finding and nurturing innovative talent in the Science and humanities faculties are also essential. India Inc must wake up to the fact that with the increased level of automation being achieved through information technology, trained and groomed science graduates and humanities graduates will also significantly supplement the efforts.

After all it is the current scenario when we are experiencing severe shortages of trained manpower and the likely scenario of this not improving in the near future, drive India Inc for this effort. It must be wholesome and complete effort to make this programme really successful.
I wish the programme is revisited and improved.where you will of the immediate future

Contempt of Court - Need for a Second Look

Truth as a defence in Contempt of Court Proceedings is indeed a welcome step. More importantly as the Honourable Senior Judge argues this is the first step. He has taken the extraordinary step of announcing his pride in not holding anybody in contempt of court during his service. While this should be adopted by one and all of the judges, it is necessary to provide to the public(Master!), a comfort that a legal functionary if found erring when examined under this context, under such examination by the appropriate authority shall be liable.

I strongly recommend that such a provision is debated and introduced in the statute.

Who is doing the saving

A series of articles in your paper ( India's young savers will prove McKinsey wrong - Sunday the 13th May, Macro scan - Who is doingg the Saving and Investing and How countries Compete - a nice crisp extract from books under E- Dimension - Both in today's editon) all have focused on one critical issue of the change in savings and investments patterns in the last few years.

That there is a shift in who is doing the Saving has been acknowledged and is accepted. The challenges for the policy makers are to capture this change, understand the factors behind this change and generate model which can project their impact at the Macro Level together with the key parameters which cause these changes.

Any growth will bring in change inevitably. That the shift is from agro based industries, to ITes and BPOs, industrial establishments is abundantly clear. Hence the savings are not from from agriculturists but from workers, executives and generally the white and blue collared community. This has been encouraged by the governments policy initiatives to make our country "Competitive". This is a welcome change and is accepted by one and all as the way to move forward.

But what should worry the policy makers is the impact this change makes on capital formation at the grass root level of the economy.

Indians are generally known for their thrifty habits and hence saving is prevalent across households. Their savings especially in the rural and semi urban areas are the seed capital of many an enterprise, retail outlets and small shops. These savings have been supporting the active functioning of the small enterprises and any deceleration in the savings growth at this micro level, will seriously erode the capital formation ability.

Given the near absence of institutional support at this level (our major bank's focus is on big ticket investments) unless a dedicated effort is taken immediately to address this issue brought forth in your articles, we may be seriously disrupting our basic economic structure. It is therefore necessary for the policy makers to understand this change and focus on providing substitutional avenues where seed capital can be easily accessed at the micro level.

We are challenging the retailers by bringing in Global players as their competitors and simultaneously also challenging their abilities to access seed capital through our policy initiatives of bringing in modern industries and IT services. We are acquiring their land for our grandiose SEZ's and the parks. While these initiatives bring in a change for the better for some, the policy makers need to appreciate the disruption these changes cause and provide a substitute, alternate mechanism.

As otherwise we may mortally harm the retailers, which in the long run could hurt everyone.

Carnatic Music

Indian Music, in particular Carnatic Music, is full of unique characteristics. Your paper with its coverage have over the years, brought out its nuances to generations. Your coverage in today's paper under "This day that Age" and Music Scan is one such instance where you have put in word what we the Music audience feel and participate in and at the end of the concert (or listening in) carry with us.

Carnatic music is driven by a highly passive, but knowledgeable, critical individual audience who have their own preferences. Similarly the artistes are individualistic, with their own style. But both know the broad rigorous limits which makes the participative effort sublime.

Carnatic Music is of meditative quality and adaptive to help it carry this tradition through ages.

Budget 2007-08

As the fine print is being read and the implications sink in, the clarity of the man in control on the way forward is becoming more clearer to us all the common men. Here is a man who is no hurry. He knows that in these middle overs, he has to keep the run board ticking and not go overboard with flashy strokes. The slog overs are just around the corner with election to come in early 2009.

While, a little bit of tinkering has been done for now, one can expect a land mark 2008 -09 budget which could be a please all. Bold measures including allowing increased freedom for investments for Indians in various foreign assets can be expected. With the institutions to channelise foreign exchange reserves in to Infrastructure projects in place, I am sure he will initiate bold measures to shift a significant portion of reserves to Infrastructure.

Infrastructure Upgradation

The author's comment that the enabling environment is essential for a successful implementation of infrastructure up gradation is appropriate and is the accepted norm. However to imply that nothing has been done in the ground will belittle the achievements we are seeing in terms of competitive offers coming in by way of "Negative Grants" in highway projects and investors appetite for large Public Private partnerships in Airports and Mega Power Projects.

Even to achieve the targeted completion of the projects already commenced, increased mechanisation is needed. This would call for mobilising large, sophisticated construction equipment machinery. In some capital equipment segments our existing capacities are fully booked and we need to look at imports. Developers, as in the case of Power Projects, make commitments to offer competitive prices based on imported equipments with better efficiency and earlier deliveries.

Government has therefore done the next correct thing to announce the roll out of support for these initiatives, by committing to use the forex.

As regards, the reserves, from the way in which we are growing in many sectors, it is just a question of time before we have many more Dollar streams starting from the additional Refining capacities being added to manufacturing capabilities in the auto ancillaries sector to Telecom components equipment.

RBI's new approach

The title as befitting a Central banker is just a hint for the well heeled and one needs to drill down and mull over the contents to understand the implications.

The suggestions by the former governor is very timely and needs to be implemented. We need to "segregate a part of the reserves that can be traced to more sustained flows" and allow a government agency to manage these funds to achieve more than " 6 % plus returns" will really help the economy. I see the "Invisible receipts" which our economy boasts of as one amount which is sustainable and growing. These receipts majority of which emerge from middle east can be invested in infrastructure projects to accelerate the growth.

The "comrades" will also like the idea.

Power Sector

At the core of the beleaguered Power sector is the ownership issue. Are state governments responsible to the public or is it the central government's role? Governments at centre and states have conveniently not addressed this issue as it affects their vote banks. No sector invites Private capital with assured returns with most of the cost variables being pass through. In spite of it we have not seen capital coming in to this sector.

It is therefore clear that what is needed is enabling provisions, which allow for a sensible business plan to implemented by competent organisations and achieve their returns. Enabling provisions will include interference free "disconnection" of Power Supply in the event of default, recovery of dues with Penalties and above all a free environment where an organisation can perform with out the elected representatives having their say on day to day matters.

While we have made such major strides in new technology areas, it is disheartening to see that we are not able to get our act together on providing this basic infrastructure. We have already tackled the communication issue and are on our way in the transportation segment with the giant railways achieving world class performance.

Policy makers should quickly address this and come up with working models which will invite talent and capital. In the absence of bold initiatives, dark nights and idle hot days are ahead!

Inclusive Education

One needs to revisit the concept of Educating the future generation and think out of the box to bring in innovative methods of truly educating the future Indians. While the current educational system suits a segment, we need to devise new patterns to implement our desired objective of "Inclusive Education".

Training in skills which are appropriate for a segment of the population combined with the basic knowledge of Language, Arithmetic, Civic Sense etc is one of the sure ways of achieving success in this endeavour. One needs to make a propaganda of the advantages of such a curriculum so that the children are voluntarily sent to the schools.

Sports has been neglected for too long. While we are fighting over reservations in Post graduate education, people in power have not made any effort to tap the enormous potential that is available in Sports. Rural sports can transform to a major entertainment business in the Semi Urban and rural areas. Today, the urbanites has hijacked this area as well and along with it the funds. Why is it necessary to have the best of the training facilities in Metros? will it not be a better idea to have them in multiple District level locations where the basic skills are available in abundance and waiting to be tapped?

Spotting Excellence is the primary task. To identify and implement systems for spotting excellence is the first step. To nurture such talents, it is essential to build Public Private model so that the truly talented benefit and the benefit reaches all.

No Point in Blaming RBI ?

The authors have correctly argued that RBI has limited scope for deploying other instruments.

But what the RBI can do and which has failed to do is to prevail up on the Finance Ministry to deepen the debt market. Corporate paper is nearly absent in the debt market and there is crying need for it to be quickly implemented so that the Non agricultural credit growth is met at rates which the industry can service and credit growth in this segment is not mixed up with the rest of the market.

Similarly expansion of currency notes in circulation, which is taking place year on year to support the Real Estate expansion and phenomenal rate increases is being ignored. It is surprising that RBI as an institution which does not come under any direct influence of the Government should turn a blind eye to this phenomenon.

It is necessary for RBI to take a bold step in this regard and announce through its reports the damage currency based transactions bring to its policies. As long as RBI continues to hide and thus encourage such transactions, they will be blamed and quite correctly too.

Issues at Sugar Industry

Your leader on the need to address the issues that plague the country's Sugar Industry is timely.

Given the fact that we are reaching new highs in terms of total sugar produced in the country with surpluses being seen at the same time globally, we need innovative policies and location specific support so that the stake holders are protected when the down side becomes steep. Today the sugar industries have multiple revenue streams through export of Power and Ethanol. In some locations some of the factories are even buying Bagasse for burning and producing power.

Under such a scenario, one has to address the Sugar co-operatives, mills and companies to make reasonable profit out of their by products, be it Ethanol or Power produced from their co generation plants. They should be encouraged to sell their power at the highest cost toady ( Rs.7.45 per KWH). This is feasible only if the restrictive provisions on the Power Trader are removed and the trader is incentivised with appropriate margins to pool these stand alone resources, collate and sell.

Similarly the blending of ethanol is being talked about for a while. It is the appropriate time to encourage and provide additional incentives to the industry through special prices for ethanol at this time.

A holistic approach from a macro perspective needs to be taken to support this sector at this stage.

Flip Flop in Export and Import

The blame for the debacle in the sugar Industry is being placed at the governments steps for its flip flop attitude in first banning Exports and then rushing to provide subsidy for exports all in a manner of 12 to 16 months. Similarly on the Cement front where the government invited with open mind (and quite correctly too) foreign multinationals to invest in Indian cement plants and create additional capacity, is now crying wolf saying that they are profiteering. Of course they have to profit and not for a social cause. It brought in a additional levy and now it is thinking of lifting it.

Iron ore, Wheat are other stories and so is the pulses story as your correspondent Mr. Chandrashekar eloquently highlights the failings of the government machinery. We are thinking of banning forward trade while RBI encourages hedging in international exchanges!

All this points to very serious systemic maladies which need surgical intervention, followed by long term rehabilitation (read Long term sustained policies). The maladies are the near absence of trained professionals involved in the decision making when world over, people who take similar decisions are trained specifically for the job and have equipped themselves with a strong data base and modelling systems powered by technology. It is time we transparently appointed experts or hired through medium term contracts who can bring in far reaching impact on the decision making. There is need to establish a better system of collection of agricultural production and other consumption, data, and make it available on a technology platform for manipulation to prepare what if scenarios.

The government and the powers that be should be advised not to look for quick fix solution for issues concerning globalised commodities in this post WTO era. Local issues, such as an State election can bring in political pressure on decision making but the decision makers should desist from yielding to such pressures and refrain from tinkering with policy on the Export - Import front.

Otherwise they will be inflicting far more damage than good to the vote bank.

Macro Changes in Indian savings

A series of articles in your paper ( India's young savers will prove McKinsey wrong - Sunday the 13th May, Macro scan - Who is doingg the Saving and Investing and How countries Compete - a nice crisp extract from books under E- Dimension - Both in today's editon) all have focused on one critical issue of the change in savings and investments patterns in the last few years.

That there is a shift in who is doing the Saving has been acknowledged and is accepted. The challenges for the policy makers are to capture this change, understand the factors behind this change and generate model which can project their impact at the Macro Level together with the key parameters which cause these changes.

Any growth will bring in change inevitably. That the shift is from agro based industries, to ITes and BPOs, industrial establishments is abundantly clear. Hence the savings are not from from agriculturists but from workers, executives and generally the white and blue collared community. This has been encouraged by the governments policy initiatives to make our country "Competitive". This is a welcome change and is accepted by one and all as the way to move forward.

But what should worry the policy makers is the impact this change makes on capital formation at the grass root level of the economy.

Indians are generally known for their thrifty habits and hence saving is prevalent across households. Their savings especially in the rural and semi urban areas are the seed capital of many an enterprise, retail outlets and small shops. These savings have been supporting the active functioning of the small enterprises and any deceleration in the savings growth at this micro level, will seriously erode the capital formation ability.

Given the near absence of institutional support at this level (our major bank's focus is on big ticket investments) unless a dedicated effort is taken immediately to address this issue brought forth in your articles, we may be seriously disrupting our basic economic structure. It is therefore necessary for the policy makers to understand this change and focus on providing substitutional avenues where seed capital can be easily accessed at the micro level.

We are challenging the retailers by bringing in Global players as their competitors and simultaneously also challenging their abilities to access seed capital through our policy initiatives of bringing in modern industries and IT services. We are acquiring their land for our grandiose SEZ's and the parks. While these initiatives bring in a change for the better for some, the policy makers need to appreciate the disruption these changes cause and provide a substitute, alternate mechanism.

As otherwise we may mortally harm the retailers, which in the long run could hurt everyone.

Rupee Appreciation

he article "Making Sense of Rupee Appreciation" made an interesting reading. As the authors have pointed out there are diametrically opposite views on allowing the Rupee to appreciate.

The depreciating rupee while allowing for the perceived existence of the "Export competitiveness", also adds to the coffers of the Largest Indian Corporate "RIL", whose refining margins are better than the benchmarked Singapore rates and ONGC coffers are swelling in spite of partly providng for the petroleum bonds. Do our agriculturists who do not have any recourse but to use Diesel for even their water requirements for the field and are adjusting to international parity pricing for the Diesel, in the words of author have to further bear the brunt of a depreciated rupee to ensure that our Software, textile and other cash crop exports are competitive?

Socially and Politically such an approach would truly bring in surprises.

Another important view of the leading thinkers including Sri. Shnamugasundaram (whose article appeared in your paper recently) have correctly highlighted the danger of advocating the view of the appreciation of rupee while evaluating with respect to US dollar only. These thinkers have correctly argued that there has been no significant appreciation of the rupee when compared with the basket of currencies. A look at the behaviour of other Asian currencies in a comparable 4 year time frame support this view.

Added to this fact today, our export industries enjoy the pricing power. They are in the market because of their other inherent strengths and a favourable exchange rate will make it better no doubt, but they can survive. IT companies are not too much bothered about the impact this appreciating rupee make on their balance sheet. Textile, Diamond Industry, Cashew nut processing industry, (just to list a few) are crying hoarse about the impact the appreciating rupee is creating on their balance sheet. But they are quickly launching their equipment up gradation projects taking advantage of the appreciating rupee. Others are shrewed to enough to ensure that their value addition is retained at the same levels by driving down purchase costs(imports of Cashew Kernels and raw diamonds) again taking advantage of the appreciating rupee.

In the petroleum front we are in threshold of a major break through in Gas Exploration. Our refining capacity has significantly increased and is further increasing. This will definitely reduce the current level of our import dependence on Oil. Similarly with the current boom in the gulf market due to the high prices of crude our expatriate labour are also getting significant increases and I am sure will renegotiate their salaries to match with the appreciating rupees.

We need a stable forex climate but the boundaries and timing are influenced by our own typical situation and the increased globalisation which we are facing today. It cannot be closely pinned to some other models. Some of the benefits of this appreciating rupee is already being felt. It has brought in a negative outlook on "Inflation Expectation"and is helping controlling inflation.

Literally if the policy makers do not worry about the price of cabbage a new set will come soon enough to look at it!

Power Plans

Country's Power Plans have gone hay wire and the entire administration at Central & State levels show to be agitated about it. But at ground level very little action is seen. Industries who are operating at close to their installed capcities have their own captive generation units and have self electric generation as a basic assumption when they draft their business plans, be it the domestic or export market.

On the other hand farmers and residential consumers are left to fend for themselves. Unfortunately our rulers believe that they can continue to get away with the euphemism of providing free power for ever and continuously increase the numbers who become eligible for it as well. It is time that responsible leaders take the trouble of impressing up on one and all the fallacy behind this whole effort.

An complete overhaul of the system of directing the subsidies to the targeted, to decentralisation of activities, breaking up the Goliath organisations to manageable and accountable entities is the need of the hour. As you have argued correctly in your leader, any efforts to derail this effort should be discouraged.

Policy makers can look at alternatives and they need to provide special incentives to performing organisations. But having decided on a direction and the pace at which they will move forward, any dithering in way will put the hapless millions in to further misery.

Education Vouchers

Providing quality primary education can help to catapult our nation as whole entity to the top leagues given the favourable demography captured vividly through the survey and presented with clarity in the article "Is there a Solution(for our educational maladies)?"

The issues which need to be addressed vary from the existing multifarious presence of castes, their local social interactions to attract investment and talent for providing the educational service and finally to achieve that the funds reach the targeted. This will bring in the much needed private sector investment to expedite improvements.

One of the possible solutions is the use of "Education Vouchers".

Our educational systems are stretched and as Prof Indiresan has argued(here as well as in his columns in Vision 2020), brilliant students need to be identified and taught by brilliant teachers. In the crucible of Education institutions one needs to have a balance of brilliant students and teachers to sustain the reaction. Targeted funding will act as the catalyst which will accelarate the process.

It is incumbent on the powers that be to focus on the "solutions which are staring at us" and decide to implement.

Higher Education - A total need revamp required

Approach to higher education, needs a total revamp. Policy makers are aware of the need but are doing very little as they are still grappling with the problem of education at the Primary level. They are also focused on side issues such as Reservations as they feel that this is politically correct. They could not be more worng.

Whenever, Government has distanced itself from any sector India Inc has risen up to the occasion. The Cement sector, Automobiles and Telecom sector stand out as shining examples. In the education segment when the need for harnessing Private sector investment was recognised and policy guidelines were being formulated, in the mid eighties, politicians who are also great entrepreneurs grabbed the opportunity. When they enter a field they instinctively block the others entry, as by nature they are very competitive and like the armed forces are trained to protect their turf by any means.

So it is necessary for the governments both at the center and the states to stay away, to encourage investment in this segment. They will do a lot of good including themselves, it they observe the Sector from arm's length. One need not look farther than the Tata Institute (now Indian Institute of Science), Birla Institute of Technology and Science Annamali University and more recently SSN college and many more like that to realise that India Inc is aware of the need to contribute their might and have proved their ability in doing it as well. The products of these institution are committed to the up liftment of India Inc as a whole. It is not mandatory for these students to work for the firms which had funded these institutions at the inception and they are free to work anywhere.

If Government decides on these lines and provide enabling provisions for India Inc to enter this segment with out any hidden agenda I am sure we will see a clear solution emerge in the next five years.