Friday, July 31, 2009

IAS officer kills 4 of family, self

In a sensational case of murder and suicide, a senior IAS officer shot dead his wife, father and two sisters before turning the gun on himself at his residence in a nearby village late last night after he was said to be depressed over CBI filing a case against him.

A 1983-batch IAS officer, Jagadananda Panda also shot his 22-year-old son Swapneswar, who was critically injured and is battling for his life in a local hospital, where he was operated upon. All the five were shot from close range and had bullet injuries in the head, police said.

Panda was the Protector General of Emigrants (PGE) in the Overseas Indian Affairs department in Delhi and was believed to be in a state of depression after CBI raided his house. Details of the case against him were not not available immediately.

The bodies of Surekha (46), father Manus (75) and two sisters Bijayalaxmi (57) and Kishori (44) were found lying in a pool of blood in his residence in Deogaon village near Sambalpur in western Orissa after his mother, who is said to have heard the gunshots, rushed from the first floor and called neighbours.

A suicide note, purportedly signed by the official, was found from his house in Deogaon, about six km from here, said Inspector General of Police Y B Khurania. It has been sent for examination by handwriting experts.

"There are indications that Panda killed his family members before shooting himself but further investigation is required," Khurania said.

Police said Panda, a Special Relief Commissioner in Orissa before proceeding to Delhi on deputation, had purchased 40 rounds of bullets from a private arms dealer in Bhubaneswar on July 27. 31 live cartridges were recovered from the house.

Panda, whose home in Deogaon was raided by CBI last week, had come on two months leave and had gone to Turkel near his village where he practised firing after his arrival from Delhi two days ago, police said quoting the driver of a vehicle hired by the official.

All the bodies bore bullet wounds in the head and appeared to have been shot from close range, police said.

The official's mother, who was on the first floor of the house, came down after hearing gun shots and called the neighbours, police said adding the main door and other entries were shut from inside.

Panda's son Swapneswar was in the intensive care unit now and could throw light on what had happened after recovery.

Doctors attending on him said there were chances of his survival as the bullet had hit frontal portion of his head.

Orissa Home Secretary A P Padhi said the priority now was to save Panda's son by bringing to Bhubaneswar for treatment, if necessary.

Though it was believed that Panda could have taken the extreme step as he was upset due to a CBI case in connection with which his house was raided, it was not clear what the case was about.

Among the items recovered from Panda's house was the receipt showing his purchase of 40 rounds of bullets for his revolver at a price of Rs. 2, 961, an official associated with the investigation said.

Panda had reached Bhubaneswar from Delhi on July 27 and arrived in Bargarh the next day. His wife and son were also with him when he came to the village.

Police, however, could not say whether his wife and son were aware that Panda was in possession of 40 live bullets.

Renting a flat? Here is a checklist!

The job of looking for an apartment on rent is not what you would call fun. However, if you know exactly what you want and where to look, you will find that it's not as bad as you thought. In fact, with these tips you may even start enjoying it.

Decide what you are looking for

It requires a good amount of time and effort to select the right apartment, especially when you are new to a city. So first decide what you are looking for.

Is your need work location-based? Or is it based on rent? Are you looking for a particular neighbourhood? Do you have a large family? Do you need to be near your children's school? Do you have pets that need to be accommodated too?

For whatever reason you are looking to move to an accommodation, do make a note of all your requirements before you make your final choice.

Put a priority list for the features

Basically, your needs and desires are the first priority when you look for your apartment. You may not find an apartment that fits all your needs and requirements, but there is no harm in creating a list to help you.

It is not feasible to compromise your lifestyle in a hurry to rent an apartment. For example, many apartments are old and traditional buildings with no facilities of lifts (elevators).

In case you are on the fifth floor and have aged people staying with you, it would be a strenuous task of climbing all those steps. So, it's advisable to know the apartment well before you choose it.

Other facilities to be taken note of include the number of rooms, bedrooms and bathrooms, proper ventilation, security arrangements, water supply, maintenance facilities, a good view etc. And don't forget to enquire on its pet-friendliness if you have a pet.

On listing out your priorities in the apartment, the next thing you have to do is to cross out the things you can live without. This way, in case you need to forgo something, at least it will be at the bottom of the list.

Make a personal tour

No matter how you find the place you are deciding to rent, a personal tour is absolutely crucial, even if it is recommended by your best friend. Visit, visit and visit the apartment. This is because only you know what exactly will make you comfortable in your house, what difficulties you have faced in the place you lived earlier, etc.

Go from room to room, preferably with your family and let each one state their opinions. This way you will not miss out on anything.

Inspect the property carefully. If there's any damage, you not only would want to ask that it be fixed, but wouldn't want to be blamed for it later. Make sure such problem areas are addressed in a lease, either by your agreeing to live with it, or the landlord agreeing to fix it by a certain date.

Check out common walls (walls shared with adjoining apartments). The more walls in common, the greater the chance of noise from next door. Also consider a common entrance in terms of how much privacy you may want.

Figure out market value of rent for the kind of place you are opting for

There are several ways you can obtain this information. If you are considering going through brokers they can provide you with fair market value rents in your choice area. Doing your own analysis also makes excellent sense.

The Internet is the most convenient and accessible way to locate the fair market value of rent for your apartment. There are several publications available that will provide a generic idea of rental rates in that area.

It is important to remember that fair market rents will vary depending on the location of the property. Different neighborhoods demand higher or lower rates. As they say in real estate, 'location is everything'.

The best way to check out whether you are getting the best value, go through advertisements of similar apartments in similar locations.

After you have done this, the next thing to do is to check if your rent can be accommodated in the budget and still leave room for other expenses - saving, entertainment, leisure and if need be the flexibility to pay for an EMI as well.

Legal issues: Reading the clauses of the contract with extreme care

And now, for one of the most important things. Before you settle down with your decision to rent the apartment, you need to look carefully at the contract and at the clauses stipulated in it.

Renters sometimes sign blindly and never get to know what they signed for. Because of this, disputes arise and sometimes they do not even know that they have foregone their right to protest once the contract is signed!

So you need to pay careful attention to the requirements, read everything carefully and only then, put your signature on the piece of paper.

Happy house-hunting!

Thursday, July 30, 2009

Infosys to start hiring from next year

HYDERABAD: IT major, Infosys Technologies Limited plans to go to campus recruitment across the country next year.

Chief Executive Officer and Managing director, Infosys technologies Limited, S Gopalakrishnan told reporters on the sidelines of a CII meeting that companies which skipped campus recruitment following global economic downturn this year, are looking at training about 18,000 of their employees under the extended mode till January 2010.

The recruitment and expansion would begin early next year, he said hoping that economy will revive in second quarter of the fiscal. Economic meltdown affected the growth rate of leading IT companies including Infosys, he said.

Gopalakrishnan expected better performance of IT companies including Infosys in the first quarter results. He said the IT and ITES industry would continue to grow despite the economic slowdown and its growth rate is expected to pick up by mid next year.

Gopalakrishnan said that his company has no immediate plans to expand activities in two tier cities in Andhra Pradesh.

Infosys work for the second campus at the SEZ has already begun and is expected to be complete by next year as the campus with over 10,000 employees in Hitech city was inadequate, he said.

Over 500,000 join New Pension Scheme

The government on Tuesday said that more than 500,000 people have subscribed to its New Pension Scheme till June-end.

The New Pension Scheme (NPS), launched by the government, was extended to all citizens of the country from May 1, 2009. Under the scheme, 50 per cent of the funds is allowed for investment in the stock markets.

"The total number of subscribers in the New Pension System as on June 30, 2009 was 5,40,244," Minister of State for Finance Namo Narain Meena told the Rajya Sabha in a written reply.

He said there were two main tax related issues pertaining to NPS contributions and the Finance Bill, 2009, has given these a consideration.

The benefit under Section 80 CCD of the Income-Tax Act, 1961 was restricted to the employees of the central government and other employers (i.e. the salaried class) and was not available to other individuals (like self-employed).

"The Finance Bill, 2009 has proposed to extend the benefit of Section 80 CCD of the Income-Tax Act, 1961 to all individuals," he said.

Further, he said the accumulated pension wealth was subject to tax at the time of withdrawal and the bill proposes to exempt from tax all withdrawals if such amount is used for purchasing an annuity plan in the year of exit.

Entrepreneurs find a lot can happen over coffee

Six months ago, when many of his colleagues were fighting to hold on to their jobs, Shardul Mohite quit his job as a software engineer to become an entrepreneur. These are early days yet, but with a growing list of clientele — extending to as far as the UK and the US — Mohite feels he has a successful model on his hands. The 24-year-old confesses that it was the Open Coffee Club (OCC) that played a major role in getting Webnoise Lab, his start-up firm, rolling.

Though not quite an angel investor nor a venture capital entity as there is no funding, OCC has helped many start-up companies such as Webnoise hit the road running. With the Pune chapter starting in April 2008 as a platform to boost entrepreneurship, the club now has 1,050 registered members. It has a similar number of members in Bangalore and Chennai besides having a presence in Kochi, Kolkata, Delhi, Mumbai and Hyderabad.

"The first generation entrepreneurs share details such as registering a company, managing HR and marketing of products with the next generation. The sole aim of the club is networking of like-minded people and helping their business grow. We meet every second Saturday of the month and around 50-75 entrepreneurs, including prospective ones, take part in the meeting," said OCC Pune chapter coordinator Santhosh Dawra.

The club also invites specialists to deliver talks that eventually help members manage their company better. "Now, we are a team of eight, and most members are youngsters. We are currently working on a product called Do-Bill-It, an invoice-based application for individual creative freelancers, which is a niche segment," said Mohite.

The maiden OCC was flagged off in Chennai in August 2007, taking a cue from the OCC model started in London in February of the same year. "We formed the Chennai OCC with 25 members. The number has now crossed the 1,000-mark. True to its name, we used to meet in coffee houses. But later, when the number of members increased, we opted for larger venues," said OCC co-ordinator Siddhartha Govindaraj, CEO of Silver Stripe Software Pvt Ltd. Govindraj along with Vaidhy Mayilrangam, chief technology officer of Serendio Software, started the OCC in Chennai.

Amrinder Singh, co-ordinator of the OCC Bangalore chapter, said there were youngsters from rural areas who have sold off their bikes, laptops and even cell phones to get their virgin ventures rolling.

Wednesday, July 29, 2009

Indian outsourcers vie for $1 bln BP deal-report

BANGALORE, July 24 (Reuters) - India's top outsourcers, Tata Consultancy Services and Infosys Technologies , are vying with global rivals for up to $1 billion deal from oil major BP , the Economic Times reported on Friday.

Wipro , India's No. 3 IT firm, and Mahindra Satyam are also competing with IBM and Accenture for the contract to be awarded in August, the newspaper said, citing an unnamed person with knowledge of the matter. A spokeswoman at Infosys declined comment on the report, while Tata Consultancy spokesman said the company does not comment on customer specific issues. Officials at Wipro and Satyam could not be immediately reached.

BP, which has outsourced most of its application development, system integration and infrastructure management works, to about 30 firms including IBM, Accenture, Mahindra Satyam and Infosys, wants to bring down the number of vendors, the paper said.

A BP spokesman told the paper the company was reviewing its IT services providers and the process was nearing an end, but he would not confirm numbers of current or future technology service providers. (Reporting by Sumeet Chatterjee; Editing by Ranjit Gangadharan)

Tuesday, July 28, 2009

IBM’s (IBM) Relocation To India

One of the concerns analysts have about the nature of second quarter earnings is that they are beating forecasts due to cost cuts and not improvements in revenue. Cost cuts can help margins for a brief period, but very few companies can operate without any expenses at all.

Companies that can institute permanent cuts without hurting revenue potential are relatively few, particularly among very large corporations. IBM (IBM) is one of these. It has begun to move thousands of jobs to India. That is old news, but its stellar second quarter earnings reminded both investors and IBM’s workforce that labor costs in America are still relatively high for most companies and that the population of highly trained workers outside the US is rising rapidly. Outsourcing cheap labor has been an efficient way to cut factory production for decades. Moving professional services overseas, particularly with firms that have tens of thousands of workers who need to have years of specialized training, has been very difficult—until recently.
The Administration hopes that it can rebuild the manufacturing sector of the country as a means of improving GDP growth to offset what may be a long-term slowdown in consumer spending. The cost of labor is so high in the US that it is hard to imagine how this plan will work. There is almost nothing that can be built in America that cannot be built elsewhere for less, even if the labor involves complex, technical skills.
The government might be better off abandoning the improbable goal of turning back the clock on the manufacturing sector and turn, instead, to find reasons for American companies to keep professional, technical, and engineering costs inside the US.
IBM’s second quarter revenue was down 13% to $23.3 billion. Net income rose 12% to $3.1 billion. IBM highlighted its expense control as part of its earnings announcement. “Total expense and other income decreased 19 percent to $6.3 billion compared with the prior-year period. SG&A expense decreased 19 percent to $5.1 billion. RD&E expense of $1.4 billion decreased 14 percent compared with the year-ago period.” That could be interpreted as saying that the company is sending more work overseas to save money.
IBM is headquartered in Armonk, NY, a small town in northern Westchester County, New York, a long drive from New York City. It is not near any large metropolitan area. It is not located in Armonk for any strategic reasons. If the management wanted to be in India, it could be. Revenues from the Americas were only $9.9 billion dollars last quarter. IBM’s sales in its home market are an only modest part of its overall business.
The objection, both from IBM’s employees and some parts of the American labor movement about the tech giant exporting as many as 5,000 jobs to India early in the year, is shortsighted. IBM may end up moving a much bigger part of its operations offshore because it is a reasonable means of cost reduction.

Armonk is no place for a Fortune 100 company to have its headquarters. The firm could operate from any large business center in the world.

Douglas A. McIntyre

Desi cos log in big offshoring deals

CHENNAI: Even in a recession hit market where clients are cutting outsourcing budgets, Indian firms such as TCS, Infy, Wipro, HCL and Tata Commu

nications have won large outsourcing deals this year placing them among the top 10 global service providers -- on contract value terms.

Even though the total contract value of awarded outsourcing deals fell by 22% to $40.2 billion in the first six months of this year, Indian tech firms continued to compete neck and neck with the global biggies such as IBM, Accenture, HP/EDS, CSC, shows data from TPI. TPI is the largest sourcing data and advisory firm and measures commercial outsourcing contracts valued at $25 million or more.

Indian firms dominated the information technology outsourcing (ITO) segment ($33.2 billion) split into application, development & maintenance (ADM) and infrastructure segments.

Among the desi firms, the top deal winners were Cognizant, Infosys, HCL, TCS and Wipro featuring in the ADM section. HCL and Wipro were again listed among the top 10 infrastructure deal winners, TPI said.

“Retail, diversified financials, transport, and network telecom services provided strength to the ITO market. TCS was the top vendor to win deals in three of these markets, while Infosys appeared as one of the top vendors in the Americas and the APAC region,” HSBC IT analyst Yogesh Aggarwal said.

Tata Com -- only Indian firm among network service bigwigs such as AT&T, BT, Ericsson and Nokia Siemens -- grabbed a place amongst top 10 club in a segment where deals worth $13.4 billion were awarded till June.

While the broader BPO market remained weak, experts believe Indian vendors relied on client mining, rather than winning new mega-accounts. Infy, that employs 16,700 people in its BPO division, was among the top 10 BPO service providers in the H1 of 2009, wherein globally contracts worth $7 billion were awarded to the likes of Capita, Perot Systems, Xerox, RR Donnelley and Johnson Controls.

Sunday, July 26, 2009

Cognizant, HCL give increments in a tough year

HCL is also looking to reduce the burden of perquisites of tax on employees that came into effect in the Budget

Kritika Saxena / CNBC-TV18

Mumbai: In spite of an economic slowdown, software services firm Cognizant Technology Solutions Corp. has given pay hikes to its employees.
HCL Technologies Ltd has also said that it is giving out performance-based increments to all its employees.
Anand Pillai, global head, HCL Technologies, said: “Yes, we are giving out increments this year, which will be entirely performance based.”
But that’s not the only way the firm said it wants to take care of its staff.
The company is also looking at ways to reduce the burden of perquisites of tax on employees that came into effect after the removal of fringe-benefit tax—which was paid by companies—in the Budget for 2009-10.
“What we are doing right now is increasing the education component offered to employees,” said Pillai.
“We will offer certificate courses accredited from renowned institutions so that employees can avail these free of cost,” Pillai added.
Employees, therefore, will not have to pay a 30% tax on reimbursement of education fees.

Body shopping at Accenture

Think you haven’t seen a game changer in a long time? Check out body shopping at Accenture
by Mitu Jayashankar | Jul 23, 2009

W e are not only playing good defense,
we are playing offense.
- Bill Green, Chairman and
CEO of Accenture, June 25, 2009

Bill Green, CEO Accenture
Image: Arko Dutta/Reuters
Bill Green, CEO Accenture
Green’s rugby-speak should send quavers across India’s software companies, which have nibbled away business from big technology consulting firms such as Accenture and IBM over the past 15 years. A few months ago, Accenture started a new business unit named Concadia. This new unit will use the very same technique that the Indian firms employed to penetrate in to the cozy club of IT services to turn the tables on them. Through Concadia, Accenture has started offering IT capacity expansion services which analysts call staff augmentation services.

Which others call body shopping.

Headed by Vinod Bagal, a managing partner who has been with Accenture for over 15 years, Concadia has taken the industry by surprise. “People are surprised to hear that Accenture is offering staff augmentation services,” says Frances Karamouzis, vice president of research at Gartner. “This business is really about offering the lowest price for a software developer and Accenture typically never competes on price”.

The company’s Web site promotes Concadia’s just-in-time capability to deliver people to clients. Beyond this, the company declined to give details of the business plan or revenue targets from this unit.

The world’s largest technology consulting firm, which employs 177,000 people in 120 countries and has annual revenues of $23 billion, is certainly taking its new unit seriously. It has put Bhaskar Ghosh, a former Infosys hand who joined Accenture six years ago, as its delivery head in India. Industry sources say that Ghosh’s team in India is 200-strong now.

This shows Accenture has truly woken up to the threat from Indian companies. “(A) few years ago, Indian companies were not even on the radar of companies like Accenture,”says Thomas Davenport, professor and director of research at Babson College, Massachusetts . “Things have definitely changed in the meantime. Indian IT firms have put pressure on margins of these firms,” Davenport, who was once a partner at Accenture, says.

But how come this is a game changer?

Management and technology consulting firms like Accenture have been “moving down” to add outsourcing services ever since Indian outsourcing companies started “moving up” to add consulting services. This was helped by pressure from clients who told the consulting firms to help them cut costs continuously.

Concadia is a direct threat to companies such as Tata Consultancy Services, Infosys and Wipro. These rivals desire to upstage the likes of Accenture in the end-to-end solutions business and Accenture has picked up the gauntlet. “Global companies have figured out how to work the global delivery model, and Indian companies need to come up with a new trick if they want to stay with their above-20-percent margins” says the consulting head of an Indian IT firm.

In an email response to a questionnaire, Accenture’s corporate communications official Alex Pachetti says, “We are providing the services to our clients that are asking for this type of service. Not all clients ask for this. We are not chasing the opportunity. We will see over time what the level of demand is.” The main challenge for Accenture is that given its consulting DNA, it will be extremely difficult to sell this low-value service. To overcome this problem, Concadia is already hiring sales people from Wipro and Infosys.

Saturday, July 25, 2009

Indian IT companies bid against MNC rivals for $1 bn BP deals

BANGALORE: India’s offshore outsourcing firms, including TCS, Infosys, Wipro and Mahindra Satyam, have locked horns with MNC rivals IBM and

Accenture for up to $1 billion worth of outsourcing contracts to be awarded in August by British Petroleum (BP).

BP, which currently outsources a majority of its application development, system integration and infrastructure management projects to almost 30 suppliers including IBM, Accenture, Mahindra Satyam and Infosys, wants to bring down its IT costs by up to 30% by working with fewer vendors handling more work, at lower rates.

“Every BP business unit at BP was running its IT operations separately, with a different set of suppliers. This led to complexity and a higher cost of operations. With this consolidation, BP now wants to work with not more than six vendors globally,” said a UK-based expert familiar with BP’s sourcing strategy. He requested anonymity as he is not authorised to comment about the contracts.

When contacted by ET last week, a BP spokesman confirmed that the supplier review is nearing its end. “Yes, we have been reviewing our strategic IT providers, and are getting close to the end of that process, but I can’t confirm numbers of the current or possible future providers,” said spokesman Robert Wine.

Sridhar Vedala, MD of sourcing advisory firm Quantum Step, says customers are now breaking down their requirements into infrastructure management, application development and maintenance, and are selecting vendors according to their competencies. “A few years ago, ABN Amro undertook a similar exercise,” he added.

While customers in the US, the top market for Indian companies, are scaling back on outsourcing, British firms will spend around $15.6 billion this year, according to research firm Ovum-Datamonitor.

While Mahindra Satyam counts BP as one of its $40-50 million customers, Accenture and IBM currently have a lion’s share of the outsourcing pie, estimated to be anywhere between $300 million and $400 million.
“This consolidation offers opportunities for vendors such as TCS and Wipro to grow their revenues from BP,” said a senior executive at one of the tech firms bidding for the BP contract. He requested anonymity because the contract has not yet been announced.

Some experts believe that customers are increasingly seeking to give away their application development and maintenance projects to Indian offshore firms and are letting IBM remain the master integrator. “When Telstra recently announced a new set of vendors, IBM was chosen the master supplier with Infosys and EDS working in tandem with Big Blue,” said an outsourcing expert based in Australia.

In large outsourcing contracts, the infrastructure management piece, or services involving management of computer systems, servers and other enterprise systems, is bigger in terms of value. For instance, when Australian phone firm Telstra awarded $1.2 billion worth of contract last month, IBM walked away with the $750-million infrastructure piece, while Infosys and EDS shared the $450-million application pie.

Friday, July 24, 2009

UK unions protest gas and power major's outsourcing move

Three of the largest unions in Britain -- GMB, Unite and Unison -- have spoken against a proposal of National Grid, the gas and power supplier, to outsource some of its non-core activities like payroll processing, personnel functions, accounts, invoicing and procurement to India.

The unions are planning a major protest in Birmingham on July 27, at National Grid's annual general meeting. National Grid is a leading supplier of gas and electricity in Britain and the northeast region of the US.

GMB has said senior executives from NG were in India earlier this month, scouting for ways to cut costs by outsourcing these functions from India.

In an e-mail response to queries from Business Standard, a NG spokesperson said the company already outsources some information services support from India, from companies including Tata Consultancy Services, Wipro and Zensar Technologies.

"Cost is not the main reason why the company outsources some of its IS support to Indian companies. It is because there is currently an IT skills shortage in the UK and because of the high standard of IT skills in India."

The unions have said that 181 jobs from NG's Newcastle site (in northeast UK) that currently undertakes these activities are at stake. The unions have protested this move, particularly in the backdrop of NG recently announcing global profits of 2,915 million pounds for the year ending March 31, a 12 per cent increase over the previous year.

"Despite these huge profits, staff and unions at Newcastle have been working with the company to identify further savings," a union statement said.

Gary Smith, GMB National Secretary, said: "One of National Grid's competitors is offering a commitment to not to offshore their back ground office functions. National Grid is the most profitable company in the sector and the employees deserve the same commitment."

Smith said the company had started to outsource some non-core activities from CSC in India in 2003, but was forced to return these activities to the UK in 2008.

The company spokesperson said no decision has been made on the future course of action for outsourcing more from India.

"We have not taken any decisions to outsource any services or close any location. We announced we had narrowed down the number of external companies we are looking at from four to two. We don't expect to make any decisions until later in the summer and we are committed to consulting our employees and trade unions throughout the process."

The company said it has been exploring other way to cut costs, apart from outsourcing of services.

"Since February, through an internal performance challenge, we have also been identifying internal improvements to meet the challenge of finding savings of around 7 million pounds," the company said.

Thursday, July 23, 2009

Race remains a factor in American society: Obama

Asserting that he is a testimony to the progress America has made with regard to racism, President Barack Obama has acknowledged that race remains a factor in the US society.

"That is a sign, an example of how, you know, race remains a factor in the society," Obama said at a White House press conference when he was asked about the arrest of a prominent Harvard University Professor Henry Louis Gates Jr in Cambridge last week.

That doesn't lessen the incredible progress that has been made, he said.

"I am standing here as testimony to the progress that's been made. And yet the fact of the matter is, is that, you know, this still haunts us," Obama said.

Even when there are honest misunderstandings, Obama, the first African-American president, said the fact is that blacks and Hispanics are picked up more frequently and often for no cause casts suspicion even when there is good cause.

"That is why I think the more that we are working with local law enforcement to improve policing techniques so that we're eliminating potential bias, the safer everybody is going to be," Obama said.

Although the charges against Prof Gates have been dropped, he told in an interview: "This is not about me; this is about the vulnerability of black men in America."

"My understanding is, at that point, Professor Gates is already in his house. The police officer comes in. I'm sure there's some exchange of words. But my understanding is, is that Professor Gates then shows his ID to show that this is his house and, at that point, he gets arrested for disorderly conduct, charges which are later dropped," said Obama, adding that the professor is a friend of his.

"Now, I don't know, not having been there and not seeing all the facts, what role race played in that. But I think it's fair to say, number one, any of us would be pretty angry; number two, that the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home; and, number three, what I think we know separate and apart from this incident is that there's a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately," he said.

"That's just a fact," Obama said in response to the question.

Australian residency laws get tougher

Thousands of Indian students enrolled in vocational courses like cookery and hairdressing, which till now allowed a 'fast track' to permanent residency, will have to sit for a test requiring 'competent' English language skills while applying to live and work in Australia.

"Trades people applying to live and work in Australia permanently from July one will require increased English language skills," according to new immigration policy changes issued by the Australian Immigration Department

The change will mean that people applying for the general skilled migration visas overseas will have to pass a test showing they have competent English. In the past, the pass mark was based on vocational English, a lower standard.

"Trades people lodging skilled migration visa applications overseas will be required to meet the new English language level under International English Language Testing System test.

"This change will bring trade-related occupations in line with the English language level required for all other occupations on the Skilled Occupation List," the department said, adding that research has shown that migrants proficient in English have better employment outcomes.

Earlier, international students, including Indians, who completed courses in hairdressing and cookery were getting extra migration points towards applications for permanent residency because the two trades were included on the Migration Occupations in Demand List.

Asked if cookery and hairdressing courses wherein Indian students were enrolled in large numbers were removed from the list, a spokesperson from Immigration Department told PTI that 'unless applicants with these qualifications are sponsored by an employer or state/territory government, their applications for permanent residency are not being processed as a priority.'

The new changes were part of the government's plan to take up a task of constructing a long-term planning framework for migration.

Last month, Australian Government also announced reducing permanent skilled migrant intake for 2009–10 Migration Programme, in response to the continued economic slowdown, according to minister for immigration and citizenship, Chris Evans.

"The government remains committed to a strong migration programme but unemployment in Australia is expected to increase as the economy slows," Evans said.

The migration intake in the coming year reflects the economic climate while ensuring employers can gain access to skilled professionals in industries still experiencing skills shortages, he said.

"The reduction is being achieved through a cutback in places for the general skilled category rather than in the high-demand employer-sponsored category or in areas in which Australia has critical skills shortages," Evans said.

The new changes of withdrawing most vocational trades, including plumbing, welding and carpentry from its skills priority list, apart from proposal to remove cookery and hairdressing from the list of occupational skills in short supply was a seen as a step that may have widespread ramifications for the 15-billion-dollar international education industry of the country.

Hairdressing and cookery were popular courses among Indian students as extra migration points allowed a 'fast track' to their residency in Australia.

The new changes could affect students enrollment number from India.

For the year to July, national training sector enrollments jumped 44 per cent on the previous year, reflecting the popularity of private training colleges as lucrative businesses thrive on fees from international students.

The Immigration Department spokesperson said that the Australian government's first priority was to provide training and education so that Australians have the skills to address the country's main labour market requirements.

"Our immigration programme is closely linked to this process and seeks to supplement it only where there remains unmet demand for skilled workers," he said.

"In the light of the current economic crisis, only applications from people sponsored by an employer, a state or territory government or with an occupation on the Critical Skills List will be given processing priority. Hairdressers and hospitality workers are not on the CSL," the spokesperson said.

Overseas students who have taken these courses in Australia, if they have skills in short supply, can still be sponsored by an Australian employer and granted a visa, provided they meet all relevant criteria for grant of visa.

The department said that applying for a student visa and applying for general skilled migration are separate processes -- neither there is an entitlement to, nor should it be assumed that permanent migration will follow a finite period of study in Australia.

TCS recalls 1,200 from the US

TCS at Zona Americas in Montevideo.In a bid to reduce costs and increased offshoring focus, Tata Consultancy Services, India's largest information technology company, has recalled close to 1,200 employees from the US and has decided not to hand out any salary increment this year.

The company had announced a 10 per cent increment across the board during the last financial year. TCS has almost frozen its lateral (experienced) hiring and will look at this only on an as-required basis. Instead, it will hire fresh college pass-outs. Over the next three quarters, it will hire 24,885 young men and women from various campuses.

As large users of information technology services abroad have cut their budgets, companies like TCS have been looking at ways to control costs. Employees account for over 50 per cent of TCS' revenue; hence, the company has relooked its salary bill and policy on hiring.

Though there will be no increments this year, employees will still get a component of their variable pay. "We have two components to the variable pay: One that is paid every month and the other that is paid at the end of the quarter. This quarter we will pay that as well," said TCS vice-president and head (global human resources) Ajoy Mukherjee.

Mukherjee, however, added that the company will promote over 9,000 employees, who could not be promoted last year due to cost issues. "We were looking at this every quarter but it could not be done," said Mukherjee.

TCS has also not filed for a single H1-B visa, which allows people to work in the US, till date this year. The company, as of now, has about 18,000 people with valid visas (H1-B and L1). "We do have sufficient people with valid visas. The 18,000 employees include those who are already in the US. Looking at this, we decided not to apply for any fresh H1-B visa," said Mukherjee.

Govindraj Ethiraj: Is Air India an airline?

Tata Steel made a virtue of ‘also’ making steel a few years ago. It was perhaps the first, last and only private sector company to draw comfort from its prowess in civic affairs. For most PSUs in India though, this is an area not much deliberated upon, mostly because the businesses are monopolies. No one cares or asks.

Air India is a good example of a company that started out as a monopoly but has failed to do what Tata Steel did once the goody monopoly days were over — downsize and re-organise. Among other mis-steps of course. How else would you explain the fact that close to half its 31,500 employees are not even in the core business of flying an airline?

If that’s news to you, you might be right in asking: What do they indeed do? Let’s begin at the gate. Air India has roughly 2,000 employees guarding its assets. Obviously, you can’t have that many people and not have an elaborate managerial hierarchy. Air India even has a head who is drawn from the Indian Police Service. Presently, he occupies the position of executive director.

Did you ask why? Well, I am told that’s because Air India is the ‘national carrier’. So possibly, there is also a vigilance department whose precise staff strength I could not determine (rest assured it’s not a lean team). There is a chief vigilance officer who is part of top management and ‘seconded’ from the civil or revenue service.

I’m tempted to amplify this. The vigilance department’s job is to “initiate steps to curb corruption and malpractices in Air India.” This sounds fine if it was the local water or road works department. But an airline in a highly competitive industry? Why should it sound to people outside like most of the folks inside are perpetually up to some hanky-panky, unless monitored!

You also have 2,000 employees in security because there are more than just aircraft that need guarding. There are some 21 hangars which service Air India’s aircraft. And all the equipment and spares that go with that. And, of course, there are some 5,600 employees in the engineering services arm which service the aircraft. Quite competently, by any standards, but competence in engineering is not quite the issue here.

Have you visited Air India’s imposing headquarters at the tip of Mumbai’s Marine Drive recently? Well, there you will find more security personnel, with security check levels so high you might be pardoned in thinking you are about to board an aircraft. And that is good. Except that Air India does not occupy all the floors. Until recently, TCS was also headquartered there.

Speaking of services, Air India has close to 10,000 employees working in ground handling services. These are services provided by Air India to foreign airlines — check-in, baggage handling and so on — that do not or cannot invest in full-fledged bases in the country. To be fair, this endeavour makes money (Rs 1,000 crore topline and Rs 200 crore bottomline, if reports are to be believed).

Hiving off the non-airline from the airline operations is one solution to separate the diseconomies of scale or the forced economies of scale. It’s not that the Air India management has not woken up to this. Last month, a discussion on these very lines took place among aviation ministry officials. It was decided that ground handling, maintenance repair and overhaul (MRO) will get hived off, the latter in joint ventures with Boeing and Airbus. This is the engineering services bit referred to earlier.

And then there are the logistically straining initiatives like the Haj pilgrim service. Since 1954, Air India has been ferrying Haj pilgrims to Mecca. Laudable but not an assignment Air India clamours for. The government makes the airline ferry some 100,000 pilgrims every year (along with Saudia Airlines) and pays the fare. Last year the figure was Rs 700 crore.

This is the broad story of Air India and the tribulations of being a government-owned company. It’s the same story with some variations across most PSUs in the country. When you buy shares in a PSU, remember you buy not just the core manufacturing or services business but schools, hospitals, buses to ferry employees and school children.

This is not to knock the nobility of their existence or purpose but to argue that the same services could be rendered to the larger community by the same government and from the dividends that are paid back by the monopoly PSUs.

And finally on Air India, if all the hiving off hits the wall, then maybe the way to go is to redefine what Air India is. It’s not an airline, it’s a multi-faced aviation company. That way you will have fewer people stressed. Of course, fixing the hole in the balance sheet will take a little more than a renaming ceremony.

Wednesday, July 22, 2009

Nevin John: Anil Agarwal - Showing his mettle

Anil AgarwalThe best of Anil Agarwal is yet to come. When the entrepreneur-turned-billionaire mopped up $1.5 billion (including $500 million from Vedanta) from a stagnant American financial market in just six hours, the experts and even his critics have changed their views on the Vedanta chief. Agarwal still has more weapons in his arsenal, they say.

About 80 institutional investors have subscribed to the American Depository shares of Sterlite Industries — the flagship firm of the Vedanta group — to finance Agarwal’s plans in power generation.Given India’s huge, and growing, power deficit, Agarwal believes there is great scope for big businesses in the power sector.

Born in Patna to a fabricator of grills and gates, the metal czar has generally chosen to go against conventional wisdom. The listing of Vedanta Resources in London was one of the many unpredictable moves of Agarwal. In 2003, he raised $825 million from the London market. About two years ago, his firm Sterlite raised $1.75 billion from the US — again, a quick move.

In much the same way, Agarwal acquired bad assets across India and showed his skill in turning them around. He paid Rs 550 crore for Balco in 2006, when nobody would touch it. Later, he picked up Hindustan Zinc for Rs 600 crore.Given Agarwal’s ability to find value in seemingly bad assets, his bid for the bankrupt US copper miner Asarco is being keenly observed by his rivals.

Having burnt his fingers while planning to restructure his group, Agarwal was especially careful this time around, and spent many days and nights working on his strategy.

Though his recent turn to spirituality has mellowed his approach, the business decisions continue to be sharp and crisp — with the support of his executive army. Vedanta deputy executive chairman Navin Agarwal and chief executive officer M S Mehta are spearheading two separate teams for business activities in the eastern and western hemispheres. Vedanta chief financial officer DD Jalan and Sterlite finance director Tarun Jain are the financial brains behind Agarwal.

Agarwal plans to use the funds raised from the US for building about 9,000 Mw power capacity by 2012. His energy division is already generating about 2,000 Mw, making him the second-largest private-sector power generating company after Tata Power. For the power and metal business expansion, he is planning an investment of Rs 70,000 crore.

The size of the investment is not a big issue for Agarwal. In his words, “We have enough cash to move ahead.” Vedanta’s $6 billion cash reserve instils confidence in the business mogul. He has already indicated his willingness to buy the government’s residual stake in Balco and Hindustan Zinc — this will require an investment of around Rs 8,000 crore.

Agarwal, who made his own way from a room at Kalbadevi to a $20 million mansion at Mayfair in central London, is not looking back. People close to him say more daring moves are in the offing.

Australian government to offer permanent residence to skilled Indian workers

NEW DELHI: The skills that are essential for the Australian economy in the long term are available in India, and the Australian government is
looking to tap the young Indian base in a big way in the coming years.

The Australian minister for immigration and citizenship Chris Evans, who is in New Delhi, in the wake of widespread violent attacks against Indian students in Australia, told ET that in view of the ageing workforce in Australia, the government was increasingly looking to attract Indian IT, engineering and medical professionals as permanent residents under the skilled stream migration programme (SSMP).

“Our medical system is already dependent in a big way on Indian healthcare professionals and the important message that we’d like to send out in India is that we’re looking for Indians with the right kind of skills for our economy. The Indians are a sizeable community in Australia and very well settled there. In fact, they are the second largest community of immigrants after people from Great Britain,” Mr Evans said.

Even though the ministry of immigration in Australia has recently cutback the size of the skilled stream migrant programme, Mr Evans said that there was no reason for potential skilled immigrants from India to worry. “We have gone in for a small cutback in the numbers in view of the global slowdown this year. However, we are still running one of the biggest skilled immigration programmes in recent years. Young Indian professionals as well as Indian students who graduate out of Australian colleges with the right skillsets are most welcome to come as permanent residents. Besides, the programme is likely to be scaled up again soon as the economy improves in perhaps a year or so,” Mr Evans said.

The Australian government is also planning to introduce more stringent quality assurance norms for education providers there-specially those in the vocational education and training segment-so that international students are not duped.

“We have already introduced an English language test for international students who apply for permanent residence and will launch the skills test for the same category early next year. This will help ensure that only those students who are suitable for jobs in Australia apply for permanent residence. By ensuring that education service providers maintain strict quality rules, we hope to ensure that international students are given the best quality of services,” the minister said.

Monday, July 20, 2009

TCS headcount falls for first time

Discretionary spending from clients is still under pressure and discretionary projects are sporadic, says Mr N. Chandrasekaran.

Our Bureaus

Mumbai/Chennai, July 17 The headcount at Tata Consultancy Services was down for the first time in the first quarter ended June 30, as the company has put a near-freeze on hiring. It reported a net addition decline (in headcount) of 2,119.

“Our attrition level has remained similar to what it was in the previous sequential quarter. However, since we have controlled gross additions, the overall headcount has come down,” said Mr Ajoy Mukherjee, Vice-President, Head (Global Human Resources), at a press meet here to announce the results.


TCS reported an attrition of 11.5 per cent, while making a gross addition of 2,828 employees during the quarter.

There was some respite for employees as the entire quarterly component of the variable compensation will be paid for the quarter.

During the last fiscal, 95 per cent of them were given 95 per cent of their variable pay (where the company’s quarterly performance is also a determinant).

At the end of the first quarter, TCS had an employee strength of 1,41,642; foreign nationals formed 8.3 per cent of the total base, while women accounted for 30 per cent.

The company has reiterated that it is on track for its hiring programme for this fiscal.

“We intend to honour all offer letters made. The first batch will start joining us in the current quarter and this will continue in a staggered manner throughout the year,” said Mr Mukherjee.

Campus offers

The campus offers made for the current fiscal totalled 24,885. TCS has made about 111 job offers to prospects for its development centre in Cincinnati, Ohio.

Of these, 99 have accepted offers, while 38 have joined. It may be recalled that with the help of tax rebates and grants from the Ohio State government, TCS inaugurated the centre in March, 2008. The project aims to create 1,000 jobs there over three years.

Discretionary spending from clients is still under pressure and discretionary projects are sporadic, according to Mr N. Chandrasekaran, Executive Director and COO, TCS. Discretionary spends are those that IT decision-makers in client companies decide on a continuous basis, using their discretion, as opposed to IT budgets for their companies fixed once a year.

Scope in fin services

In a call with analysts, Mr Chandrasekaran said that the banking and financial services sector offered more opportunities to offshore work. “Work on the BPO and integration front is available,” he said. Asked if decision-making cycles have changed since the last quarter, he said that the situation is not significantly different.

However, he said, compared to six months ago, the difference now is that management teams have changed (stabilised). “Everyone now knows the status, they have money to spend; they have cut whatever needed to be cut. But there aren’t too many projects on which decisions are waiting to be made. However, there are opportunities, in consolidation, for instance.”

Earlier, Mr S. Ramadorai clarified that the global economy continues to be weak and that TCS has still not ruled out surprises.

Saturday, July 18, 2009

Tamil Nadu to build financial city to attract investments

Chennai, July 13 (IANS) After attracting global automobile manufacturers to the state, Tamil Nadu is now targeting sectors like financial services and aviation with special schemes.

Responding to the discussions for the demands for grants for the industries department, Deputy Chief Minister M.K. Stalin Monday said in the assembly, a financial city will be built near Chennai with private participation to attract insurers, banks, mutual funds and others.

In order to attract investments from aviation sector he said the government will also set up an aero park.

The state government will also be developing country specific industrial parks to attract investments from business units located in those countries.

According to the industries department policy note submitted by Stalin in the state assembly earlier in the day, the government has identified certain countries as having higher potential to make investment in the state.

Orders have been issued for the development of country specific industrial parks for Japan, Korea, Finland, Germany and France.

Each industrial park will be of 100 acre size and will be developed by State Industries Promotion Corporation of Tamil Nadu Limited (Sipcot).

The policy note states the state government is developing industrial parks and special economic zones (SEZ) in different parts of the state to disperse the industries.

Approval and final notification for multi product SEZ at Nanguneri in Tirunelveli district has been obtained while a similar project is being developed in Perambalur district.

With 49 notified SEZs Tamil Nadu is ranked third among the other Indian states in terms of number of approved SEZs.

According to the policy note the 49 SEZs have a total area of 3,972 hectares with the average hectare per SEZ working out to 81.

Claiming that the government is not resorting to compulsory acquisition of and for development of SEZs the policy note states each SEZ allots lands to a number of manufacturers in the related area.

The state government has also issued administrative sanction for development of new industrial parks in Madurai, Perundurai and Cheyyar by Sipcot.

Referring to the global economic slowdown affecting the state's manufacturing sectors like textiles, garments, leather goods, automobiles, auto components, software and business process outsourcing (BPO), the policy note states the Tamil Nadu government plans more investment in infrastructure.

In the last three years the state has signed 23 memoranda of understanding (MOU) in addition to sanctioning structured package of assistance for nine projects separately.

The total investment in the state through these 32 projects would be Rs.39,741 crore.

During the calendar year 2008, the Tamil Nadu government signed 12 MOUs with a total investment of Rs.24,050 crore and issued structured package sanctioning orders for seven other projects for an investment of Rs.5,462 crore.

Indian American doctor couple charged with $31 mn fraud

WASHINGTON: An Indian-American doctor couple in Houston has been charged with illegally distributing 1.3 million tablets of a drug and defrauding

several public and private health insurance companies of $31 million by filing false claims.

According to the indictment returned by a federal grand jury Thursday, Dr. Arun Sharma and his wife, Dr. Kiran Sharma, both 54, operated the Allergy, Asthma, Arthritis and Pain Centers located on Cole Street in Webster, Texas, and another on Garth Road in Baytown, Texas.

The indictment alleges that Dr. Arun Sharma routinely saw in excess of 70 patients per day and that he routinely wrote prescriptions for hydrocodone that were not for a legitimate medical purpose in exchange for cash payments, the Federal Bureau fo Investigation said in a press release.

Dr. Sharma allegedly received the cash payments for his hydrocodone prescriptions directly from the patient and he instructed his patients to take the prescriptions to certain pharmacies to be filled.

Arun and Kiran Sharma, according to the indictment, stored large amounts of cash received from the sale of hydrocodone prescriptions at their home. Kiran Sharma allegedly transported large amounts of cash received from the sale of the hydrocodone prescriptions to two safe deposit boxes - one each at Bank of America and Prosperity Bank.

The doctors also were charged with specific counts of illegal drug distribution for hydrocodone prescriptions written to specific patients.

Both doctors are also accused of conspiring to defraud Medicare, Medicaid and private healthcare insurers including Blue Cross Blue Shield of Texas, Aetna, Cigna and United Healthcare of more than $31 million for facet joint injections and other medical procedures that were allegedly never performed.

The court has ordered summons to be issued directing the Sharmas to appear in federal court for arraignment on August 3, 2009.

Upon conviction, each of the 17 health care fraud counts and the healthcare conspiracy charge carries a maximum penalty of 10 years in a federal prison and a $250,000 fine.

The drug conspiracy and each of the 10 drug distribution counts carries a penalty of five years imprisonment and a $250,000 fine. Parole has been abolished in the federal prison system.

Friday, July 17, 2009

Elattuvalapil Sreedharan: The 'Metro man'

Elattuvalapil Sreedharan, Delhi Metro, CEOLast Sunday's mishap on the Delhi Metro, which left six people dead, may mark a revision in the generally favourable image of its CEO.

On July 12, 2009, Elattuvalapil Sreedharan turned 77. Judged by any yardstick, the day was unusually eventful for the man who has headed Delhi Metro Rail Corporation for more than a decade. Early in the morning, he learnt of the collapse of one of the Metro bridges under construction, killing six workers including an engineer. Later in the day, he announced his resignation as DMRC's managing director, owning moral responsibility for the mishap.

The government, however, was in no mood to let Sreedharan go and requested him to take back his resignation. The second phase of the Delhi Metro project was due to be completed by the end of 2010. To have accepted his resignation at this stage could have only one consequence. The project would have floundered with no guarantee that it would meet its deadline. The following day, Sreedharan retracted his resignation and the government heaved a sigh of relief.

It was a relief because Sreedharan's reputation has spread far and wide for two personality traits. One, he is a man of rare integrity. His impeccable record in the manner in which he has discharged his responsibilities with honesty, transparency and commitment has few parallels in the country.

Two, he is inflexible on many issues. Critics and a few of his former colleagues in the Indian Railways, where he worked for about 36 years before retiring as Member (Engineering) in 1990, even describe him as obstinate.

The government became aware of this inflexibility in the early stages of the Delhi Metro project. Sreedharan, who displays the energy of a much younger man, insisted that Delhi Metro should opt for the standard gauge for its tracks, while a large body of opinion including the Indian Railways preferred broad gauge to ensure uniformity of tracks in all railway networks across the country. Sreedharan was reported to have threatened to quit if his choice for the standard gauge was not accepted.

Several rounds of hard negotiations later, Sreedharan was persuaded to accept the broad gauge for the first phase of Delhi Metro. If the government thought that was that, it was mistaken. For Sreedharan, however, the gauge controversy was by no means over. In the second phase of the project, he had his way with the introduction of the standard gauge in many sections. The consequence: Two kinds of trains will be running on the Delhi Metro network - one set on broad gauge and the other on standard gauge.

If the government has made adjustments with such inflexibility it is also because of Sreedharan's integrity and enviable track record of completing projects ahead of deadline. Starting from the reconstruction of the Pamban bridge connecting Rameshwaram to the mainland in Tamil Nadu in 1963 in 46 days against a six-month target to the construction of the Konkan railway project in difficult terrain within the scheduled seven years, Sreedharan has become a national hero in a country in which completing projects on time and keeping civil contractors in check is considered nothing short of a miracle.

It was this track record that also helped him earn the kind of autonomy and freedom of which other public sector managers could only dream. The government's decision to appoint him head of the Konkan railway project in 1990 was accompanied by the rare covenant that the authorities could not remove him before the project was complete. As a result, Sreedharan was able to change the alignment of the Konkan railway route at will, even though that meant constructing more tunnels across a relatively fragile terrain.

At the same time, there was no fear of any disruption to his tenure as the head of the Konkan railway project, though then Railway Minister C K Jaffer Sharief made no secret of his displeasure with Sreedharan on more than one occasion.

Sreedharan's appointment as the Delhi Metro head did not come with any such covenant, but by now his reputation ensured that no government would meddle with his style of operation.

His success with Delhi Metro encouraged him to propose similar Metro networks in other cities - a move that faced some criticism and resistance from powerful sections within the central government. His open battle with the Planning Commission over the Hyderabad Metro project eventually resulted in Delhi Metro withdrawing from the project in the Andhra capital.

Sreedharan had objected to the project being granted to a consortium led by Maytas Infrastructure - a firm promoted by disgraced Satyam founder Ramalinga Raju - because it proposed to pay the state government revenue, instead of taking a grant from it, based on its earnings from real estate projects along the metro route. Sreedharan had argued that the structure of the project made it a real estate play and accused the state government of altering the route to suit the private contractor.

Sreedharan also made no secret of his opposition to the urban bus corridor project proposed by IIT Delhi professor Dinesh Mohan and was vocal in his criticism when the Delhi arm of the project ran into a host of execution problems.

Indeed, he was often perceived to have made light of earlier accidents in the Delhi Metro, such as the collapse of a crane in east Delhi that crushed the occupants of a bus last year and other smaller mishaps later.

In recent months, Sreedharan appeared not to be averse to enlarging his legend of a deeply religious, honest man who had beaten the odds in public life. Indeed, such was his popularity with the media that he largely escaped censure for those accidents.

Last Sunday's mishap, however, changed all that. Even as Delhi Metro gets down to understanding what could have led to the collapse of the bridge and what other faults may have crept in other such structures, critics are pointing to possible flaws in the system that Sreedharan has created.

Did the contractors follow the design of the bridges approved by Delhi Metro? Does Delhi Metro have its own design outfit? Or are the designs also made by these contractors? Has Delhi Metro built in-house restoration expertise, needed at the time of such accidents?

The answers to these questions are yet to emerge as Sreedharan gets back to work. But it is clear that the final phase of Sreedharan's career may have to pay a lot more attention to undoing the damage caused by the accident that took place on his 77th birthday.

HCL unit buys SAP divison of S Africa's UCS group

NEW DELHI (Reuters) - HCL Axon, a unit of HCL Technologies, has bought the SAP division of South Africa's UCS Group for an initial $7.7 million, the Indian firm said in a statement on Friday.

HCL Axon, which helps firms business management software from Germany's SAP AG, said it would also make payments to UCS over two years based on the growth of the purchased unit.

The deal wpould close on August 1, it added.

Thursday, July 16, 2009

Dismiss Mayawati government, demand BJP, SP leaders

NEW DELHI: The arrest of Uttar Pradesh Congress chief Rita Bahuguna Joshi and the attack on her house by Bahujan Samaj Party (BSP) workers led to

a demand for the dismissal of the state government by Bharatiya Janata Party (BJP) and Samajwadi Party (SP) leaders on Thursday.

BJP MP from Uttar Pradesh Maneka Gandhi said in the capital: "The time has come for the Uttar Pradesh government to be dismissed. In every single constituency, people have been sent to jail for absolutely nothing."

"What did Rita Bahuguna Joshi say? She didn't say much and after that she even apologised. Why can't she speak her mind? What kind of democracy is this? President's Rule should be imposed in the state."

Speaking to the media at the main entrance of parliament house, SP leader Akhilesh Yadav -- son of party chief Mulayam Singh Yadav -- demanded the dismissal of the Uttar Pradesh government.

Another SP leader, Rajya Sabha MP Kamal Akhtar, said: "The administration in the state has completely collapsed. There is a virtual dictatorship of Mayawati and therefore we demand that this government be dismissed."

BJP leader Mukhtar Abbas Naqvi also spoke against the Mayawati rule: "We don't justify what Rita Bahuguna Joshi had said and whatever was done by the BSP workers after that. It's a political move to woo Dalit votes."

"Both the parties -- one at the centre and the other in the state -- are trying to divert attention from real issues like the drought-like situation in Uttar Pradesh and price rise."

BSP workers ransacked and set fire to Joshi's home late Wednesday night. Around the time her house was under attack, Joshi was arrested in Ghaziabad en route to New Delhi. She was charged under the Scheduled caste and Scheduled Tribe (Prevention of Atrocities) Act 1989, for allegedly making derogatory remarks about Mayawati.

IT cos go slow on H-1B visas

India's second-largest information technology services provider, Infosys Technologies, has applied for a mere 405 visas till date for financial year 2009-10 - its lowest application count in recent years.

While the company did not provide figures for the comparable quarter of the last financial year, HR head and member of the Infosys board, Mohandas Pai, confirmed that "the number of visa applications this year has come down, essentially because demand is down and so is the volume of work".

The company made 4,800 H-1B visa applications in the financial year ending March 31, 2009 (the cost of one H-1B visa is said to be around $3,000 - around Rs 145,000). On a cumulative basis, Infosys had 8,700 H-1B visa holders on its rolls as of December 31, 2008. This came down to 8,200 by March 31, 2009. "We are self-sufficient on the visa front," noted Pai.

Infosys reasons that client budgets are now more short-term in nature, which requires fewer onsite employees than in the past. Infosys' top rivals, TCS and Wipro, are said to have applied for fewer H-1B visa applications this year, too.

While they refused to divulge the numbers, the top three IT firms are understood to have recalled about 1,000 workers each in the June quarter as part of greater offshore leverage.

Moreover, the recently-introduced Grassley-Durbin Bill in the US aims to set tougher wage standards, which may increase salaries for H-1B workers, as well as impose limits on the number of visa workers to 50 per cent of the workforce. In a bid to meet these requirement and hire more locals (read foreigners), Infosys will hire more than 1,000 people from outside India in 2009-10.

All these factors have resulted in even the current year's H-1B visa quota of 65,000 not being filled. As of July 10, approximately 44,900 applications were filed against the application cap for the fiscal 2010 programme. Compare this with the figures in 2007 and 2008, when the 65,000 cap was met in under two days.

Wednesday, July 15, 2009

Perot pips Wipro, TCS in race for BearingPoint unit

MUMBAI: The world may have seen a slowdown in cross-border M&A deals due to the recession, but the software sector is witnessing a frenetic

pace of consolidation globally.

In a closely-fought bid that was kept under wraps, two large Indian companies — Wipro and Tata Consultancy Services — made independent efforts to acquire the European business of software major BearingPoint, but only to be pipped by the US-based Perot Systems which emerged as a front-runner.

BearingPoint Europe is currently valued at more than $700 million — about Rs 3,360 crore at current exchange rates — and would have been one of the largest out-bound acquisitions by the Indian software industry, in more than a year.

The move follows the completion of the acquisition of BearingPoint’s North American, Japanese, Chinese and Indian businesses by PricewaterhouseCoopers, as the consulting firm wanted to have a strong presence in emerging markets.

Both Wipro and TCS have denied any such move to acquire BearingPoint. However according to people close to the development and bankers involved in the exercise, the two Indian technology giants had been keen till the second stage of the acquisition process and had also accessed BearingPoint’s data room before opting out of the race due to valuation issues.

The 100-year-old BearingPoint is one of the world’s largest management and technology consultants, which was spun off as a separate firm from KPMG in 1999, but slipped into bankruptcy two years ago. Large consulting businesses have already bid and won parts of the large organisation that has a strong presence in not just the developed world, but also in emerging markets.

The European business has been a prime target for established Indian software firms. Indian service providers, which still get a majority of their revenues from the US, have been intensifying efforts to expand their client base in regions, including continental Europe.

“As usual, we do not comment on market speculation,” a TCS spokesperson said in response to an ET query. A Wipro spokesperson said: “We will be unable to comment on market speculation.”

TCS recently acquired the India-based BPO arm of Citigroup, Citigroup Global Services, for $512 million — about Rs 2,457 crore. BearingPoint provides management and technology consulting services. Even as recently as December, it was reported to have won a $250-million — about Rs 1,200 crore — contract, despite being wobbled by financial woes.

Both Wipro and TCS have been far more aggressive than the other software major, Infosys. When queried about its interest in BearingPoint, a Wipro spokesperson said: “We will be unable to comment on market speculation.” Wipro's largest acquisition to date has been that of the US-based Infocrossing for $600 million — about Rs 2,880 crore today.

“My reading is that the acquisition may have been too large for the Indian players to swallow. They were interested, but only in parts of BearingPoint's Europe businesses and not the whole firm,” said one banker on why TCS and Wipro could have dropped out.

While PricewaterhouseCoopers completed its part acquisition of BearingPoint in June, in May, another consulting firm, Deloitte took over the public services business of BearingPoint for about $350 million.

India heads in wrong direction with new budget

WASHINGTON: A US South Asia expert suggests that the Indian budget would perhaps limit the country's ascension to a global economic force and

could limit the value of India-US partnership for Washington.

As Secretary of State Hillary Clinton has noted in advance of her trip to India, the US has an important stake in Indian success, writes Derek Scissors, research fellow in Asia Economic Policy at The Heritage Foundation.

"As its clout on the world stage increases, India can play a stabilising role in the broader Asia region, partnering with the US on a range of issues including maritime cooperation, nuclear non-proliferation, education, science, and defence trade," he writes.

"India also serves as a powerful example of a successful democracy in the developing world. On the economic side, unlike many of its Asian counterparts, India is consumption-driven, not export-driven.

"Its growth and greater prosperity therefore offer outstanding opportunities for American agriculture, industry, and services," he says. "The flip side of America's stake in India is that America loses when India takes a step backward."

That seems to have happened with the anxiously awaited Indian government budget for the next fiscal year, which puts political gain over long-term economic progress, Scissors suggested.

"This kind of fiscal irresponsibility may help India's ruling Congress party win more elections, but it will not help the country live up to its economic promise," he said.

"The budget in general will have pernicious long-term effects. The huge deficit is a heavy tax on the future that lowers India's growth trajectory. But there are additional devils in the details, in particular with regard to education and liberalisation."

For most of this decade, India thrived, benefiting tremendously from earlier liberalisation, which, among other things, drew large inflows of foreign investment, he said. But "now India is heading the wrong way on the economy".

The US-India relationship is multifaceted and can certainly thrive based on political affinity and geostrategic considerations, Scissors said.

"But the direction that Congress has set for the past five years, topped off by this budget, is going to slow and perhaps limit India's ascension to a global economic force. That could limit the value of the (US-India) partnership."

Inside The Great American Bubble Machine

Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression


Posted Jul 02, 2009 8:38 AM

In Rolling Stone Issue 1082-83, Matt Taibbi takes on "the Wall Street Bubble Mafia" — investment bank Goldman Sachs. The piece has generated controversy, with Goldman Sachs firing back that Taibbi's piece is "an hysterical compilation of conspiracy theories" and a spokesman adding, "We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance in being a force for good." Taibbi shot back: "Goldman has its alumni pushing its views from the pulpit of the U.S. Treasury, the NYSE, the World Bank, and numerous other important posts; it also has former players fronting major TV shows. They have the ear of the president if they want it." Here, now, are excerpts from Matt Taibbi's piece and video of Taibbi exploring the key issues.

The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.

The basic scam in the Internet Age is pretty easy even for the financially illiterate to grasp. Companies that weren't much more than pot-fueled ideas scrawled on napkins by up-too-late bong-smokers were taken public via IPOs, hyped in the media and sold to the public for megamillions. It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out 50-story windows and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement.

It sounds obvious now, but what the average investor didn't know at the time was that the banks had changed the rules of the game, making the deals look better than they actually were. They did this by setting up what was, in reality, a two-tiered investment system — one for the insiders who knew the real numbers, and another for the lay investor who was invited to chase soaring prices the banks themselves knew were irrational. While Goldman's later pattern would be to capitalize on changes in the regulatory environment, its key innovation in the Internet years was to abandon its own industry's standards of quality control.

Goldman's role in the sweeping global disaster that was the housing bubble is not hard to trace. Here again, the basic trick was a decline in underwriting standards, although in this case the standards weren't in IPOs but in mortgages. By now almost everyone knows that for decades mortgage dealers insisted that home buyers be able to produce a down payment of 10 percent or more, show a steady income and good credit rating, and possess a real first and last name. Then, at the dawn of the new millennium, they suddenly threw all that shit out the window and started writing mortgages on the backs of napkins to cocktail waitresses and ex-cons carrying five bucks and a Snickers bar.

And what caused the huge spike in oil prices? Take a wild guess. Obviously Goldman had help — there were other players in the physical-commodities market — but the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once-solid market into a speculative casino. Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures — agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.

The history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who's Who of Goldman Sachs graduates. By now, most of us know the major players. As George Bush's last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton's former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup — which in turn got a $300 billion taxpayer bailout from Paulson. There's John Thain, the asshole chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibillion-dollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain's sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in golden-parachute payments as his bank was self-destructing. There's Joshua Bolten, Bush's chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailed-out insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York — which, incidentally, is now in charge of overseeing Goldman.

But then, something happened. It's hard to say what it was exactly; it might have been the fact that Goldman's co-chairman in the early Nineties, Robert Rubin, followed Bill Clinton to the White House, where he directed the National Economic Council and eventually became Treasury secretary. While the American media fell in love with the story line of a pair of baby-boomer, Sixties-child, Fleetwood Mac yuppies nesting in the White House, it also nursed an undisguised crush on Rubin, who was hyped as without a doubt the smartest person ever to walk the face of the Earth, with Newton, Einstein, Mozart and Kant running far behind.

Rubin was the prototypical Goldman banker. He was probably born in a $4,000 suit, he had a face that seemed permanently frozen just short of an apology for being so much smarter than you, and he exuded a Spock-like, emotion-neutral exterior; the only human feeling you could imagine him experiencing was a nightmare about being forced to fly coach. It became almost a national cliché that whatever Rubin thought was best for the economy — a phenomenon that reached its apex in 1999, when Rubin appeared on the cover of Time with his Treasury deputy, Larry Summers, and Fed chief Alan Greenspan under the headline the committee to save the world. And "what Rubin thought," mostly, was that the American economy, and in particular the financial markets, were over-regulated and needed to be set free. During his tenure at Treasury, the Clinton White House made a series of moves that would have drastic consequences for the global economy — beginning with Rubin's complete and total failure to regulate his old firm during its first mad dash for obscene short-term profits.

After the oil bubble collapsed last fall, there was no new bubble to keep things humming — this time, the money seems to be really gone, like worldwide-depression gone. So the financial safari has moved elsewhere, and the big game in the hunt has become the only remaining pool of dumb, unguarded capital left to feed upon: taxpayer money. Here, in the biggest bailout in history, is where Goldman Sachs really started to flex its muscle.

It began in September of last year, when then-Treasury secretary Paulson made a momentous series of decisions. Although he had already engineered a rescue of Bear Stearns a few months before and helped bail out quasi-private lenders Fannie Mae and Freddie Mac, Paulson elected to let Lehman Brothers — one of Goldman's last real competitors — collapse without intervention. ("Goldman's superhero status was left intact," says market analyst Eric Salzman, "and an investment-banking competitor, Lehman, goes away.") The very next day, Paulson greenlighted a massive, $85 billion bailout of AIG, which promptly turned around and repaid $13 billion it owed to Goldman. Thanks to the rescue effort, the bank ended up getting paid in full for its bad bets: By contrast, retired auto workers awaiting the Chrysler bailout will be lucky to receive 50 cents for every dollar they are owed.

Immediately after the AIG bailout, Paulson announced his federal bailout for the financial industry, a $700 billion plan called the Troubled Asset Relief Program, and put a heretofore unknown 35-year-old Goldman banker named Neel Kashkari in charge of administering the funds. In order to qualify for bailout monies, Goldman announced that it would convert from an investment bank to a bank-holding company, a move that allows it access not only to $10 billion in TARP funds, but to a whole galaxy of less conspicuous, publicly backed funding — most notably, lending from the discount window of the Federal Reserve. By the end of March, the Fed will have lent or guaranteed at least $8.7 trillion under a series of new bailout programs — and thanks to an obscure law allowing the Fed to block most congressional audits, both the amounts and the recipients of the monies remain almost entirely secret.

Converting to a bank-holding company has other benefits as well: Goldman's primary supervisor is now the New York Fed, whose chairman at the time of its announcement was Stephen Friedman, a former co-chairman of Goldman Sachs. Friedman was technically in violation of Federal Reserve policy by remaining on the board of Goldman even as he was supposedly regulating the bank; in order to rectify the problem, he applied for, and got, a conflict-of-interest waiver from the government. Friedman was also supposed to divest himself of his Goldman stock after Goldman became a bank-holding company, but thanks to the waiver, he was allowed to go out and buy 52,000 additional shares in his old bank, leaving him $3 million richer. Friedman stepped down in May, but the man now in charge of supervising Goldman — New York Fed president William Dudley — is yet another former Goldmanite.

The collective message of all of this — the AIG bailout, the swift approval for its bank-holding conversion, the TARP funds — is that when it comes to Goldman Sachs, there isn't a free market at all. The government might let other players on the market die, but it simply will not allow Goldman to fail under any circumstances. Its edge in the market has suddenly become an open declaration of supreme privilege. "In the past it was an implicit advantage," says Simon Johnson, an economics professor at MIT and former official at the International Monetary Fund, who compares the bailout to the crony capitalism he has seen in Third World countries. "Now it's more of an explicit advantage."

Fast-forward to today. It's early June in Washington, D.C. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs — its employees paid some $981,000 to his campaign — sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.

Gone are Hank Paulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm's co-head of finance.) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits — a booming trillion- dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an "environmental plan," called cap-and-trade. The new carbon-credit market is a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.