For something that is considered a lifeline and a unifying force, Indian Railways is a shame. From the lack of well-lit stations to the state of the railcars, it is a journey back in time. In fact, it is hard to imagine that anything worthwhile has been done to improve the railways ever since the British left.
Start with the stations. Most of them do not have lights outside. Unless you come very close you don't even know if it is a railway station. Even after you have come close to be able to read the board, assuming one is present, you may be disappointed since the board may be only in the local language. Does the railways expect people to travel only within their own states, or does it expect everyone to learn all of India's languages. The same holds true for most of the notices inside.
The platforms themselves are downright dirty, with people allowed to put down their mats and sleep anywhere. There are toilets, but they will scare you to death. Some stations have pay to use toilets. That sounds hopeful at first. But be prepared to be mighty disappointed. They suck and stink. Complaining, like I did, doesn't do much.
Have you seen shit & garbage on the tracks ? Sure. But have you seen a dead cow on the tracks within a station, and a dog picking pieces of it ? I have. Imagine dinner and sleep after that, especially once you realize that your train is going to do some more damage to the carcass!
The railcars seem like they have not been cleaned since the British left, and that is no exaggeration. They don't even have waste-bins. Result ? Every inch of railtrack in the nation is surrounded by garbage thrown out the windows. Not a single patch of rural scenery can be seen without seeing plates, cups etc right under your nose.
Finally, be prepared to deal with rude TTs & police. I have actually been duped by a TT into paying a fine. I refused to pay the fine without a receipt, and hence ended up paying double. Only later did I learn that I wasn't doing anything wrong, as I had assumed (and confirmed) in the first place.
Sunday, January 13, 2008
The heat is on
It is encouraging to see people taking to rooftop solar installations, especially for heating water. Though still affordable only to middle/upper-middle class, the recent incentives announced by the government will go some way to make adoption even more widespread.
Apart from independence from a state-run grid, this also relieves the state from having to build more power plants. The resulting spare capacity, and the seemingly successful UMPP, has the potential to fix India's power situation within a decade.
A larger incentive for adoption would be some ability to earn revenue from such installations either by feeding excess back to the grid or a way to store/transmit power to neighbors without expensive installations.
With solar installation prices set to fall further, Indian can realistically hope to see sunnier days ahead.
Apart from independence from a state-run grid, this also relieves the state from having to build more power plants. The resulting spare capacity, and the seemingly successful UMPP, has the potential to fix India's power situation within a decade.
A larger incentive for adoption would be some ability to earn revenue from such installations either by feeding excess back to the grid or a way to store/transmit power to neighbors without expensive installations.
With solar installation prices set to fall further, Indian can realistically hope to see sunnier days ahead.
Death of the PCO
There was a time when making a long-distance or international call meant walking to the nearest phone booth, and standing in line followed by a few minutes of claustrophobic experience. With the cellular network growth, and internet email/chat, these are going the way of the dinosaur. And rightfully so, since their time is up.
With another dozen or so players being allowed to start cellular services, prices are set to fall even more substantially soon. That will be final nail in the PCO booth.
On a positive note, it should be a little bit more pleasant now to walk on the sidewalks without these booths encroaching on whatever little space was available. Hopefully, a majority of the people employed by these booths will find replacement jobs with the cellular players.
Is the ATM booth headed the same way when payment through cellphone takes off ? Leapfrogging is good!
With another dozen or so players being allowed to start cellular services, prices are set to fall even more substantially soon. That will be final nail in the PCO booth.
On a positive note, it should be a little bit more pleasant now to walk on the sidewalks without these booths encroaching on whatever little space was available. Hopefully, a majority of the people employed by these booths will find replacement jobs with the cellular players.
Is the ATM booth headed the same way when payment through cellphone takes off ? Leapfrogging is good!
A turning point
This could very well be the fall of Berlin Wall event for India. Or it could just be yet another great disappointment in the making.
Mayawati, chief minister of India's most populous as well as underdeveloped state, announced a few weeks ago her intention to get a mega expressway built along the breadth of the state. Called Ganga Expressway the project seems to be moving very fast with bids expected soon.
Why this sudden change of heart towards real development ? Is this another lang grab scheme clothed as a development project ? One can only hope that this is a turning point. If other states follow along the same lines, announcing and implementing such ambitious projects without delay, India could really grow spectacularly over the next few years.
A good road network is what India lacks. An high impact highway like this one has the potential to accelerate growth. A handful of such road networks can lift national growth by a few points. Maybe India can achieve long term double digit growth after all ?
Mayawati, chief minister of India's most populous as well as underdeveloped state, announced a few weeks ago her intention to get a mega expressway built along the breadth of the state. Called Ganga Expressway the project seems to be moving very fast with bids expected soon.
Why this sudden change of heart towards real development ? Is this another lang grab scheme clothed as a development project ? One can only hope that this is a turning point. If other states follow along the same lines, announcing and implementing such ambitious projects without delay, India could really grow spectacularly over the next few years.
A good road network is what India lacks. An high impact highway like this one has the potential to accelerate growth. A handful of such road networks can lift national growth by a few points. Maybe India can achieve long term double digit growth after all ?
Friday, January 11, 2008
Need - a few more good men
That Indian ministers aren't generally selected for their honesty or their ability is well known. But how about getting more than just one good minister in every cabinet ?
In the previous NDA government, there was B. C Khanduri. In the current UPA government, there is Praful Patel.
The former was responsible for finally doing something on the infrastructure front. He started the work on upgrading some highways under the Golden Quadrilateral scheme. Unfortunately that work mostly came to a standstill after the new government took over - the agonizing story of development in India.
The latter, Patel, has been responsible for opening up the aviation sector. The spectacular growth in traffic and the general level of satisfaction, except with the airports themselves, is an indicator of huge progress. On the airports front - whether building brand new substitutes for the ones on the brink to opening up air travel to new regions - there is lot to be done. The potential is enormous, but will he have enough time to act ? Will the next government scuttle progress ?
In the previous NDA government, there was B. C Khanduri. In the current UPA government, there is Praful Patel.
The former was responsible for finally doing something on the infrastructure front. He started the work on upgrading some highways under the Golden Quadrilateral scheme. Unfortunately that work mostly came to a standstill after the new government took over - the agonizing story of development in India.
The latter, Patel, has been responsible for opening up the aviation sector. The spectacular growth in traffic and the general level of satisfaction, except with the airports themselves, is an indicator of huge progress. On the airports front - whether building brand new substitutes for the ones on the brink to opening up air travel to new regions - there is lot to be done. The potential is enormous, but will he have enough time to act ? Will the next government scuttle progress ?
Money talks, loudly
It is a trend, however minor. Countries that formally would rather chase away stinking Indians, are now a bit more open. With more money to spend on vacations and shopping, Indians are slowly becoming a group worth attracting. First, it was Sri Lanka, and then Malaysia followed, with their visa on arrival facilities for Indians.
The details even after months of the original announcement are a bit sketchy, especially so for Malaysia. A few sites talk about having a Singapore or Thai visa as a prerequisite.
Wonder if more countries will follow. I sure hope so. It would be nice if countries like Vietnam, Laos, Philippines, Namibia and Botswana did the same. There are thousands, make that tens of thousands, ready to go forth & explore.
India itself should unilaterally ease its visa policy for tourists, and medical visits. This should be extended to every country, with stricter fines on the airlines to cut unqualified visitors right at the source.
The details even after months of the original announcement are a bit sketchy, especially so for Malaysia. A few sites talk about having a Singapore or Thai visa as a prerequisite.
Wonder if more countries will follow. I sure hope so. It would be nice if countries like Vietnam, Laos, Philippines, Namibia and Botswana did the same. There are thousands, make that tens of thousands, ready to go forth & explore.
India itself should unilaterally ease its visa policy for tourists, and medical visits. This should be extended to every country, with stricter fines on the airlines to cut unqualified visitors right at the source.
Stuck in a different mindset
Retail banking in India has always been a nightmarish experience. Once nationalized, these servants of the people couldn't be bothered to work.
You could be standing there for a while, and still be ignored. You could be staring at the teller and he/she could be sipping coffee leisurely. You could be in tears, but he/she could still continue with her chatting.
If you go by the promotions and press-releases, we must be in a new customer-friendly era in banking. Scratch the surface, and you hardly see any difference. Lipstick on a pig doesn't make it much of a beauty. Part of the problem is that the changes have been very cosmetic, with hardly any new bank emerging. So we have the same nationalized banks with new logos, and a fresh coat of paint, and maybe new shiny buildings. There are also noises made about getting into wealth management and getting a makeover. Be prepared to be disappointed though. That is what happened to me recently at ING. There just doesn't seem to be even a formal/methodical way of dealing with requests. Getting lost is even easier, with no directions or help forthcoming.
One saving grace with all the banks is the sudden urge to open ATMs. This, as I have explained in an earlier post, definitely helps in avoiding contact with the banking staff. To that extent, banking with any of them is now much more pleasant.
Are there brand new banks that are a children of the new boomtimes ? I have been told Yes Bank could be a candidate. I haven't gotten a chance to try out their service. Have you ? Is it any good ? Or is it just a piglet ?
You could be standing there for a while, and still be ignored. You could be staring at the teller and he/she could be sipping coffee leisurely. You could be in tears, but he/she could still continue with her chatting.
If you go by the promotions and press-releases, we must be in a new customer-friendly era in banking. Scratch the surface, and you hardly see any difference. Lipstick on a pig doesn't make it much of a beauty. Part of the problem is that the changes have been very cosmetic, with hardly any new bank emerging. So we have the same nationalized banks with new logos, and a fresh coat of paint, and maybe new shiny buildings. There are also noises made about getting into wealth management and getting a makeover. Be prepared to be disappointed though. That is what happened to me recently at ING. There just doesn't seem to be even a formal/methodical way of dealing with requests. Getting lost is even easier, with no directions or help forthcoming.
One saving grace with all the banks is the sudden urge to open ATMs. This, as I have explained in an earlier post, definitely helps in avoiding contact with the banking staff. To that extent, banking with any of them is now much more pleasant.
Are there brand new banks that are a children of the new boomtimes ? I have been told Yes Bank could be a candidate. I haven't gotten a chance to try out their service. Have you ? Is it any good ? Or is it just a piglet ?
Direct to satellite
A glaring lack of infrastructure at times encourages adoption of latest technology since it would be more expensive to start from scratch to support older methods. India has seen this in a big way with the growth in cellular coverage and penetration.
The country is on its way to becoming the second largest cellular market in the world, with cellphones crossing landlines a few years ago. Landlines have actually started declining now. ATMs are another example driven by the urge to avoid contact with workers stuck in a different era.
The leapfrogging is also happening in other small but interesting ways. For too long Indians had to be content with babble on state-run radios. Private FMs were allowed, but reluctantly, with the government controlling the markets they could operate in. Then came satellite radio, specifically Worldspace. Despite its seemingly high cost (at least by Indian standards), people are taking to it in droves. The choice of high-quality, ad-free, 24-hour channels without the government-drivel is just too appealing. From individual homes to restaurants, WorldSpace seems to have become the default radio.
Now, if only some cellphone maker could bundle a satellite radio into a newer model!
BTW, Worldspace is a public company, and trades under WRSP on the Nasdaq.
The country is on its way to becoming the second largest cellular market in the world, with cellphones crossing landlines a few years ago. Landlines have actually started declining now. ATMs are another example driven by the urge to avoid contact with workers stuck in a different era.
The leapfrogging is also happening in other small but interesting ways. For too long Indians had to be content with babble on state-run radios. Private FMs were allowed, but reluctantly, with the government controlling the markets they could operate in. Then came satellite radio, specifically Worldspace. Despite its seemingly high cost (at least by Indian standards), people are taking to it in droves. The choice of high-quality, ad-free, 24-hour channels without the government-drivel is just too appealing. From individual homes to restaurants, WorldSpace seems to have become the default radio.
Now, if only some cellphone maker could bundle a satellite radio into a newer model!
BTW, Worldspace is a public company, and trades under WRSP on the Nasdaq.
Thursday, January 10, 2008
A new growth lifeline
Emerging markets, especially China & India have been popular over the last few years among investors. As growth comes to a standstill in much of the developed world, these two are growing at close to double-digit rates.
But investors seemed to have missed a slightly different angle to the new growth story. One need not invest in companies based in India or China to benefit from their growth. In a number of sectors, the expertise that U.S/European companies have built up over the years means that they are likely to get win many of the contracts. In many cases, due to the sheer size of the population, these new wins also tend to be among the largest these companies have seen to date, and it could only get better.
As one example, in an earlier opst I mentioned companies that make ATMs. Another example would be a company like Insituform (INSU), which handles various municipal contracts in the U.S. Insituform just got a $35 million sewer construction contract in Delhi, its largest such contract to date. The stock itself is beaten down, while insiders are buying. The company now seems to be set for a new growth phase. How many will miss it ?
Along the same lines, look at AECOM (ACM), which went public just a few months ago. The stock has already retreated due to slowing commercial activity in the U.S. But AECOM is likely to derive a large portion of its gains outside the U.S. Even today, a substantial part of its contracts are in the Middle-East & Asia. Isn't AECOM a safe & sound way to bet on emerging markets ?
But investors seemed to have missed a slightly different angle to the new growth story. One need not invest in companies based in India or China to benefit from their growth. In a number of sectors, the expertise that U.S/European companies have built up over the years means that they are likely to get win many of the contracts. In many cases, due to the sheer size of the population, these new wins also tend to be among the largest these companies have seen to date, and it could only get better.
As one example, in an earlier opst I mentioned companies that make ATMs. Another example would be a company like Insituform (INSU), which handles various municipal contracts in the U.S. Insituform just got a $35 million sewer construction contract in Delhi, its largest such contract to date. The stock itself is beaten down, while insiders are buying. The company now seems to be set for a new growth phase. How many will miss it ?
Along the same lines, look at AECOM (ACM), which went public just a few months ago. The stock has already retreated due to slowing commercial activity in the U.S. But AECOM is likely to derive a large portion of its gains outside the U.S. Even today, a substantial part of its contracts are in the Middle-East & Asia. Isn't AECOM a safe & sound way to bet on emerging markets ?
Wi-fi amid the chaos
A portable wi-fi detector is increasingly becoming part of personal music/video devices. This helps to avoid having to open a laptop just for checking the presence of a wi-fi network.
With a phone like the new Nokia N95, it is even more simpler. You can detect, and connect/browse. Recently, at the Bangalore Railway Station (Majestic) with not much to do I took out the phone & searched for networks. Imagine my surprise when I found two strong-signal wi-fi networks!
Indian Railways seems to have a small corner where people have received the message. They have set up RailTel to provide such a service, in collaboration with private parties like AirLink & Tata. Convenient, except that there was absolutely no indication that it was a wi-fi zone.
One would expect a bit more professional-quality promotions from AirLink & Tata. I hope they are working on it, while also ensuring a rapid roll-out. If they can blanket every railway station, airport, mall, cafe, bus depot with their network, there will be a lot more willing to sign up assuming there are flexible plans for fixed/limited period users.
Imagine - wi-fi in a decrepit garbge-littered railway platform, with almost no space to handle even one more person. Only in India! Isn't it incredible ? Just don't look at the tracks.
With a phone like the new Nokia N95, it is even more simpler. You can detect, and connect/browse. Recently, at the Bangalore Railway Station (Majestic) with not much to do I took out the phone & searched for networks. Imagine my surprise when I found two strong-signal wi-fi networks!
Indian Railways seems to have a small corner where people have received the message. They have set up RailTel to provide such a service, in collaboration with private parties like AirLink & Tata. Convenient, except that there was absolutely no indication that it was a wi-fi zone.
One would expect a bit more professional-quality promotions from AirLink & Tata. I hope they are working on it, while also ensuring a rapid roll-out. If they can blanket every railway station, airport, mall, cafe, bus depot with their network, there will be a lot more willing to sign up assuming there are flexible plans for fixed/limited period users.
Imagine - wi-fi in a decrepit garbge-littered railway platform, with almost no space to handle even one more person. Only in India! Isn't it incredible ? Just don't look at the tracks.
Incredible dump
Hundreds of thousands have been enticed to come into the country & spend their millions by a promotional campaign that has been branded as being among the most effective nation-branding efforts ever - Incredible India.
The disappointment starts at the rundown airports & rude employees, even at the tourist counter. The latter has people who seem to say I don't know more often than any other useful sentence.
Then comes the attempt to find a way, some way, any way, to get to the hotel without being robbed by auto-rikshaw drivers. If the touts along the way don't push you into the path of oncoming traffic, consider yourself lucky.
After a night's rest, with power outages, bad toilets (even in "Lonly Planet recommended" places; the "lonely" spelling is an authentic copy from a hotel) and hardly any "running hot water", one starts out the next day to the real attraction.
Be ready to be hit with a dense layer of smoke. If that doesn't kill you, the honking can drive you crazy. Dust from the barely paved road will stress test your lungs & eyes. Potholes & road bumps will make your butt hurt. The stench from multiple open sewers will kill all your desire to see whatever wonder you have in mind. Finally, the garbage strewn all over the place at the monument itself will make you depressed.
Welcome, to the Incredible Dump. Don't you wish you had settled for watching all this on the Discovery Channel from your comfy couch ?
The disappointment starts at the rundown airports & rude employees, even at the tourist counter. The latter has people who seem to say I don't know more often than any other useful sentence.
Then comes the attempt to find a way, some way, any way, to get to the hotel without being robbed by auto-rikshaw drivers. If the touts along the way don't push you into the path of oncoming traffic, consider yourself lucky.
After a night's rest, with power outages, bad toilets (even in "Lonly Planet recommended" places; the "lonely" spelling is an authentic copy from a hotel) and hardly any "running hot water", one starts out the next day to the real attraction.
Be ready to be hit with a dense layer of smoke. If that doesn't kill you, the honking can drive you crazy. Dust from the barely paved road will stress test your lungs & eyes. Potholes & road bumps will make your butt hurt. The stench from multiple open sewers will kill all your desire to see whatever wonder you have in mind. Finally, the garbage strewn all over the place at the monument itself will make you depressed.
Welcome, to the Incredible Dump. Don't you wish you had settled for watching all this on the Discovery Channel from your comfy couch ?
Presenting a different view
One easily builds an impression about a country within the first few minutes of landing. Unfortunately for India, that impression is likely to be very bad at best. Take Bangalore (or whatever it is called today). For an IT capital and a city ranked among the fastest growing in Asia, the airport (not to mention the connectivity) is a shame.
Now, in under three months, the airport (though not the connectivity) part is set to be fixed. A brand new international airport will open in March/April. For those interested in more details, here is the official website. This airport happened in spite of the state government. That shows the level of genuine concern for the state, its people and development. Like all projects in India, this has taken way too long to go from an idea to completion. In the process, it has left a few more heartbroken. I do hope the Bangalore Airport CEO, Albert Brunner, writes a book revealing all the villains in the play, and the hurdles they placed.
The connectivity to the airport though is still being worked on, and has barely moved beyond the drawing board. Some foresight & planning!
Around the same time as the new Bangalore airport opening, the new Hyderabad Airport will also open. See more at their website. While bigger & seemingly better than the Bangalore Airport, it also has the same connectivity problems. The only difference being, unlike at Bangalore, active road-building is in progress to solve it.
These two have the potential to alter the first impression of visitors to India. That may sound superficial, but it has the potential to do a lot of things. Most importantly, to show that the country means business, finally.
What is needed now is much more - a massive fast-paced program to build new & efficient airports throughout the country.
Now, in under three months, the airport (though not the connectivity) part is set to be fixed. A brand new international airport will open in March/April. For those interested in more details, here is the official website. This airport happened in spite of the state government. That shows the level of genuine concern for the state, its people and development. Like all projects in India, this has taken way too long to go from an idea to completion. In the process, it has left a few more heartbroken. I do hope the Bangalore Airport CEO, Albert Brunner, writes a book revealing all the villains in the play, and the hurdles they placed.
The connectivity to the airport though is still being worked on, and has barely moved beyond the drawing board. Some foresight & planning!
Around the same time as the new Bangalore airport opening, the new Hyderabad Airport will also open. See more at their website. While bigger & seemingly better than the Bangalore Airport, it also has the same connectivity problems. The only difference being, unlike at Bangalore, active road-building is in progress to solve it.
These two have the potential to alter the first impression of visitors to India. That may sound superficial, but it has the potential to do a lot of things. Most importantly, to show that the country means business, finally.
What is needed now is much more - a massive fast-paced program to build new & efficient airports throughout the country.
Taking them for a ride
The increased confidence resulting from a surging Sensex and economic growth has led to a lot of interesting developments in India over the last few years. Corporate confidence to do overseas acquisitions and the ability to dream big are the good outcomes, when done in moderation.
A few other developments are surreal. Industrialists who were part of the establishment even during the sickening socialist/license raj are now donning new robes using words like innovation and synergy in every other sentence. When it came to using the system to maintain their monopolies they were definitely leaders. But characters to lead the nation forward these are not.
There also have been television programs about bringing grassroots changes in India. The efforts are in the right direction, and some of the guests may indeed be sincere, but the cast of these shows makes one laugh at the irony.
For too long, Indians have been taken for a ride by movie stars, cricket heroes and populist leaders who encouraged idol-worship for their own good. It is close to impossible to find any untainted among them.
An illiterate democracy is never much of a democracy.
A few other developments are surreal. Industrialists who were part of the establishment even during the sickening socialist/license raj are now donning new robes using words like innovation and synergy in every other sentence. When it came to using the system to maintain their monopolies they were definitely leaders. But characters to lead the nation forward these are not.
There also have been television programs about bringing grassroots changes in India. The efforts are in the right direction, and some of the guests may indeed be sincere, but the cast of these shows makes one laugh at the irony.
For too long, Indians have been taken for a ride by movie stars, cricket heroes and populist leaders who encouraged idol-worship for their own good. It is close to impossible to find any untainted among them.
An illiterate democracy is never much of a democracy.
ATM nation
A few years ago it was the sight of a cellphone on every other hand that stunned an outsider in India. These days it must be the mushrooming of ATMs.
In most major cities, but also in Tier-2 cities, you can't walk 500 feet without passing an ATM. In one Tier-2 (or is it Tier-3 ?) city, I crossed 6 ATMs in a distance of around 300 ft.
Estimates vary, but the mean guess is that India now has around 25,000 ATMs as againt just 500 a decade ago. The forecasts also are all over the place, with the most optimistic expecting the number to double in around 7 years. I feel all these predictions will be beat soundly. India is likely to cross 75,000 in 5 years, and may well cross 150 thousand in 10 years. As far as penetration/density goes, India is still way far behind China. So there is definitely room to grow.
ATMs, like cellphones earlier, provide another way for the country and its people to leapfrog older technology and the lack of infrastructure. In addition, not having to deal with frumpy bank staff is always a mood-lifter.
Most Indian ATMs are from Diebold (DBD), Euronet (EEFT) and NCR (NCR). These two U.S companies could see a new growth phase soon. But they trade like value stocks, and for long-term investors they offer very attractive entry points right now.
ATMs in India have also been localized with additional applications like recharging a prepaid cell phone account via debit, and donating to some well known temples without having to visit them personally. Wonder if paying bribes via ATM is next!
In most major cities, but also in Tier-2 cities, you can't walk 500 feet without passing an ATM. In one Tier-2 (or is it Tier-3 ?) city, I crossed 6 ATMs in a distance of around 300 ft.
Estimates vary, but the mean guess is that India now has around 25,000 ATMs as againt just 500 a decade ago. The forecasts also are all over the place, with the most optimistic expecting the number to double in around 7 years. I feel all these predictions will be beat soundly. India is likely to cross 75,000 in 5 years, and may well cross 150 thousand in 10 years. As far as penetration/density goes, India is still way far behind China. So there is definitely room to grow.
ATMs, like cellphones earlier, provide another way for the country and its people to leapfrog older technology and the lack of infrastructure. In addition, not having to deal with frumpy bank staff is always a mood-lifter.
Most Indian ATMs are from Diebold (DBD), Euronet (EEFT) and NCR (NCR). These two U.S companies could see a new growth phase soon. But they trade like value stocks, and for long-term investors they offer very attractive entry points right now.
ATMs in India have also been localized with additional applications like recharging a prepaid cell phone account via debit, and donating to some well known temples without having to visit them personally. Wonder if paying bribes via ATM is next!
Rupee vs the dollar: no way to go but up
As a contrarian I like to ask the man on the street about certain things before I make a decision of my own. Many of these people tend to hold onto their beliefs until it is too late.
Such a belief, in the ability of the dollar to recover, is what I found among some of the money changers in various cities. There are quite a few that are willing to give the spot rate, or even better (Rs. 40.5!), to a dollar. I will take that without thinking twice.
Meanwhile, with another .5 cut very likely within 2 weeks, the dollar is set to crater. I see the rupee hitting 35 this year, and assuming the current trend, 30 next year.
I will make sure to check with the foot-soldiers on a regular basis. That will hopefully help in detecting a turning point in time to make portfolio changes.
Such a belief, in the ability of the dollar to recover, is what I found among some of the money changers in various cities. There are quite a few that are willing to give the spot rate, or even better (Rs. 40.5!), to a dollar. I will take that without thinking twice.
Meanwhile, with another .5 cut very likely within 2 weeks, the dollar is set to crater. I see the rupee hitting 35 this year, and assuming the current trend, 30 next year.
I will make sure to check with the foot-soldiers on a regular basis. That will hopefully help in detecting a turning point in time to make portfolio changes.
Independent regulatory bodies - need more of them
When it comes to making policy decisions, India still lags behind many countries that are on their way to a market economy. Way too many decisions are shortsighted and political in nature.
A few regulatory bodies, like TRAI (Telecom Regulatory Authority of India), IRDA (Insurance Regulatory & Development Authority) and RBI (Reserve Bank of India) serve as great examples. But unfortunately the ones I mentioned are the only ones around. It would be great to see more that can be cited.
India desperately needs similar bodies to handle infrastructure, especially road and mass transit. The sooner it happens the faster we will be on track for a longer above 10% growth phase.
A few regulatory bodies, like TRAI (Telecom Regulatory Authority of India), IRDA (Insurance Regulatory & Development Authority) and RBI (Reserve Bank of India) serve as great examples. But unfortunately the ones I mentioned are the only ones around. It would be great to see more that can be cited.
India desperately needs similar bodies to handle infrastructure, especially road and mass transit. The sooner it happens the faster we will be on track for a longer above 10% growth phase.
Wednesday, January 9, 2008
10% forever ?
Irrational exuberance, the local variant, has people believing that India is set to see a string of over 9% growth years. I see it as wishful thinking.
The current growth spurt is due to an accidental coming together of various factors. Growth in cellular access/coverage (no one really predicted it would be this big) and aviation sectors have contributed substantially by improving efficiency and thus freeing up funds for reinvesting, while also helping to keep inflation low.
The growth in those two sectors isn't going to be spectacular anymore.
India needs a new well to tap, and there isn't any around. One project that could have helped is a massive road building and upgrading. But that has slowly receded into the background.
Real estate & realty sectors cannot be the drivers. They are more the results than the reasons for further growth. There are a lot of minor growth helpers - like building of metros in a number of cities, port/airport privatization, new oil/gas exploration policy, SEZs, UMPP - but they either take a long time to have an impact or only have a mild/indirect impact.
Two other areas could still help revive growth later this year or early next year. The handing out of nationwide GSM licenses, as well possible roll-out of 3G/WiMax, could squeeze further efficiencies. There is also talk of FTA-type agreements with ASEAN, the U.S and E.U. If they all come into effect, we could still see another growth spurt.
The current growth spurt is due to an accidental coming together of various factors. Growth in cellular access/coverage (no one really predicted it would be this big) and aviation sectors have contributed substantially by improving efficiency and thus freeing up funds for reinvesting, while also helping to keep inflation low.
The growth in those two sectors isn't going to be spectacular anymore.
India needs a new well to tap, and there isn't any around. One project that could have helped is a massive road building and upgrading. But that has slowly receded into the background.
Real estate & realty sectors cannot be the drivers. They are more the results than the reasons for further growth. There are a lot of minor growth helpers - like building of metros in a number of cities, port/airport privatization, new oil/gas exploration policy, SEZs, UMPP - but they either take a long time to have an impact or only have a mild/indirect impact.
Two other areas could still help revive growth later this year or early next year. The handing out of nationwide GSM licenses, as well possible roll-out of 3G/WiMax, could squeeze further efficiencies. There is also talk of FTA-type agreements with ASEAN, the U.S and E.U. If they all come into effect, we could still see another growth spurt.
Seeing red, and likely green soon
Ever since I first flew Jet Airways back in 2001, I have been a fan. The simple efficiency won me over. I rank them above most of the U.S airlines, except maybe for JetBlue.
Recently, I got a chance to fly Kingfisher, mostly because I didn't have much of an option. I am impressed! While some of the features I enjoyed, like the live cam view from under the plane belly, were just generic A321 features, others, from a message by their chairman to the branded/all-red headphones, were definitely customized.
A lot of thinking seems to have gone into the whole experience. From the stewardesses in stunning red to the great meal combo, one can say that it is all set up to give you the good times.
Jet is already flying to international destinations. Kingfisher, thanks to its merger with Air Deccan will start doing so later this year. Kingfisher has the potential to draw a lot of non-native traffic as well, from the likes of Lufthansa to Singapore. That is bound to be a huge win for fliers as they fight over price & quality. I do hope that they realize the potential for eating into other airlines' traffic. Good connections at an intermediate hub, or onward connections from its India destination would attract even more of a crowd. The skies will look more interesting come August, and the red skirts aren't the only reason!
Will the Kingfisher Girl replace the incumbent, Singapore Girl ?
Recently, I got a chance to fly Kingfisher, mostly because I didn't have much of an option. I am impressed! While some of the features I enjoyed, like the live cam view from under the plane belly, were just generic A321 features, others, from a message by their chairman to the branded/all-red headphones, were definitely customized.
A lot of thinking seems to have gone into the whole experience. From the stewardesses in stunning red to the great meal combo, one can say that it is all set up to give you the good times.
Jet is already flying to international destinations. Kingfisher, thanks to its merger with Air Deccan will start doing so later this year. Kingfisher has the potential to draw a lot of non-native traffic as well, from the likes of Lufthansa to Singapore. That is bound to be a huge win for fliers as they fight over price & quality. I do hope that they realize the potential for eating into other airlines' traffic. Good connections at an intermediate hub, or onward connections from its India destination would attract even more of a crowd. The skies will look more interesting come August, and the red skirts aren't the only reason!
Will the Kingfisher Girl replace the incumbent, Singapore Girl ?
Airtel & Vodafone - a butt-ugly pair
AirTel and Vodafone have gone on a huge promotion drive as can be seen in their new billboards that are on all poles and medians. They have blanketed the entire nation - I can confirm that since I have been in 10 cities in 7 states over the last few weeks.
The need for brand recognition is understandable. But isn't there a better way to do it ? Also, given all the manpower/resources used in the process, is it too much to ask these guys that they also do some general good in the process ?
I for one have started to dislike these companies because of the billboards. They overwhelm you and make you loathe them.
In what ways could they have achieved some common good ? How about installing small garbage bins all over the city ? I don't mind these being covered all around with their logo. All I ask is that they be placed efficiently and that the garbage be collected.
How about converting some of the mini-billboards on the sidewalks (footpaths) into small "umbrellas" providing shade and cover from sun and rain ? Or into solar-powered street lights or mobile charging stations ?
Finally, at least ensure that the billboards don't hide traffic signals or other important signs/landmarks from drivers.
Airtel & Vodafone, are you listening ? You have a one-time chance to be more-responsible corporate citizens. Can you be one ?
The need for brand recognition is understandable. But isn't there a better way to do it ? Also, given all the manpower/resources used in the process, is it too much to ask these guys that they also do some general good in the process ?
I for one have started to dislike these companies because of the billboards. They overwhelm you and make you loathe them.
In what ways could they have achieved some common good ? How about installing small garbage bins all over the city ? I don't mind these being covered all around with their logo. All I ask is that they be placed efficiently and that the garbage be collected.
How about converting some of the mini-billboards on the sidewalks (footpaths) into small "umbrellas" providing shade and cover from sun and rain ? Or into solar-powered street lights or mobile charging stations ?
Finally, at least ensure that the billboards don't hide traffic signals or other important signs/landmarks from drivers.
Airtel & Vodafone, are you listening ? You have a one-time chance to be more-responsible corporate citizens. Can you be one ?
Tuesday, January 8, 2008
Tata's one lakh car - bring it on
Jan 10th 2008 is turning out to be one of the most anticipated days in modern Indian history. Thankfully, for the right reasons.
Tata is set to show off its 1-lakh rupees (around 2500 dollars) car at an expo. When first announced, the news was greeted with ridicule, but Tata's persistence has convinced many that they are onto something. So much so that others have joined the bandwagon.
With so much pessimism about the car, all Tata needs to show is a decent looking car with average numbers. They should have a few converts right away. It is foolish to look at such a car as an India-only or bottom-of-the-ladder only car. There are markets outside India that would welcome such a car. There are green reasons to love such a car. A safety upgrade to match stricter regulations may jack up the price, but the resulting vehicle would still be very cheap than the current offerings.
Another often heard response is that India, Indian roads and drivers are not ready for such a vehicle. Well, get ready then. You don't have much time. Really, as Ratan Tata himself has said a few times now, this will be safer than any two-wheeler. If the small car reduces 2-wheelers and auto-rickshaws in India, we all have a few million reasons to thank Ratan Tata personally! Also, such a car maybe just what we need to realize how bad the roads are, and how far behind we are in terms of building a good road network.
If, for whatever reason, the car disappoints tomorrow, be ready to swoop in on Tata shares. I don't expect them to give up, since the others are still months behind.
Tata is set to show off its 1-lakh rupees (around 2500 dollars) car at an expo. When first announced, the news was greeted with ridicule, but Tata's persistence has convinced many that they are onto something. So much so that others have joined the bandwagon.
With so much pessimism about the car, all Tata needs to show is a decent looking car with average numbers. They should have a few converts right away. It is foolish to look at such a car as an India-only or bottom-of-the-ladder only car. There are markets outside India that would welcome such a car. There are green reasons to love such a car. A safety upgrade to match stricter regulations may jack up the price, but the resulting vehicle would still be very cheap than the current offerings.
Another often heard response is that India, Indian roads and drivers are not ready for such a vehicle. Well, get ready then. You don't have much time. Really, as Ratan Tata himself has said a few times now, this will be safer than any two-wheeler. If the small car reduces 2-wheelers and auto-rickshaws in India, we all have a few million reasons to thank Ratan Tata personally! Also, such a car maybe just what we need to realize how bad the roads are, and how far behind we are in terms of building a good road network.
If, for whatever reason, the car disappoints tomorrow, be ready to swoop in on Tata shares. I don't expect them to give up, since the others are still months behind.
Intro
This is intended to be a personal scratchpad to jot observations on India, especially emerging or ignored sections that would do well in the long-term. I have spent quite a bit of time studying the U.S market, and started doing light research on India 3 years ago.
The research on India is also going to be close to the ground. Crisscrossing the country as part of my extended travel break, I will make notes on trends.
What you will not see is a comment on daily, weekly or even monthly moves in any of the indices. My investing methods are such that even a 30% one-day fall in the market don't make me feel to login and check my positions.
I would love to hear from my readers. Whether you have feedback on my observations or you have suggestions for follow-up, I will be glad to read all you have to say.
The research on India is also going to be close to the ground. Crisscrossing the country as part of my extended travel break, I will make notes on trends.
What you will not see is a comment on daily, weekly or even monthly moves in any of the indices. My investing methods are such that even a 30% one-day fall in the market don't make me feel to login and check my positions.
I would love to hear from my readers. Whether you have feedback on my observations or you have suggestions for follow-up, I will be glad to read all you have to say.
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