Business Today Sep-11-16

India’s first Prime Minister Jawaharlal Nehru called them temples of modern India and envisaged Central public sector enterprises (CPSES) as vehicles to bring about socio-economic transformation in India. Almost every subsequent prime minister and government – no matter what political dispensation they belonged to – fell in love with the idea of government-owned companies and strove to increase their number. The sole exception, perhaps, would be Atal Bihari Vajpayee, who tried his best to get the government out of being involved in too many businesses and actually created a ministry of disinvestment to sell off CPSEs. Indira Gandhi was the other extreme because she went about ‘nationalising’ flourishing private sector companies and banks, and drastically increased the number of companies that the government ran. In 1951, India had all of…

Building Castles in the Air This refers to your cover story on Railways (Mission Impossible?, August 28). A well balanced review by the author. The hurdles in the administrative structure of the Railway Board, unproductive hierarchy, rickety recruitment system, labyrinth of inter-departmental procedures, formation of unviable divisions on political compulsions, and faulty administrative zones on regional parochialism are to be blamed for the Indian Railways’ sorry state of affairs. No railway minister so far has run trains for the betterment of the nation. They only cater to their states and constituencies, unmindful of the economically unsound demands. Abruptly changing its business model will certainly put the nation out of gear. The Chinese model is not a globally benchmarked one for straight adoption. Aping them without structural changes will derail the…

8,000 CRORE is the estimated net loss for state power distribution companies for 2016/17, says an India Ratings and Research report. Cumulative losses for discoms as of 2014/15 stood at `58,275 crore. BREXIT EFFECT Infosys faced its first Brexit challenge with the loss of a five-year £300-million Royal Bank of Scotland deal, which will set the Indian IT major back by an estimated $40 million. The RBS recently called off its plans to set up a separate bank in the UK. CONNECTING THE DROPS Maruti Suzuki saved `1.36 lakh in logistics cost, or 4,000 for each of the 34 cars transported through the 1,620 km stretch of Ganga between Varanasi and Haldia. Linking of waterways under the Jal Marg Vikas project will help movement of larger volumes of goods at…

31 TOWARDS PRODUCT NATION WHAT: Conference on Building World Class Manufacturing WHEN: 31 August, Noida, UP WHAT TO LOOK FOR: The theme for the third edition of the conference is ‘Enhancing National Competitiveness’, given that India’s manufacturing sector amounting to just 15 per cent of the GDP reflects a deep structural problem with the Indian economy. 01 SPREADING WINGS WHAT: Conference on Energising Indian Aerospace Industry WHEN: 1-2 September, New Delhi WHAT TO LOOK FOR: Development of Aerospace ecosystem is very critical for taking Indian defence manufacturing to the next level. The CII-Indian Air Force conference will aim to bring together government officials, industry captains and SMEs to discuss and assist policy makers to accelerate defence indigenisation. 01 GROWTH ACCELERATOR WHAT: Massmerize 2016 WHEN: 1 September, New Delhi WHAT TO…

308,805 FARMERS COMMITTED SUICIDE BETWEEN 1995 AND 2014, NEARLY 14 PER CENT OF ALL SUICIDES IN THE COUNTRY 52% OF THE AGRICULTURAL HOUSEHOLDS IN THE COUNTRY WERE STRUGGLING WITH DEBT THE GAP Food prices rise faster than wages PROFITING FROM CROPS While expected profit per quintal in 2016/17 is negative for some crops, it is positive for crops covering major cultivable area MORE CASH, YET LESS CASH SUPPORT RICES HAVE BEEN RISING Increase in MSP of major crops also does not seem to have helped much…

In July, wholesale price index (WPI) zoomed to a two-year high at 3.55 per cent after staying in the negative zone for 17 months. The sudden burst in WPI is not good news for the economy as it would eventually show up in the consumer price index (CPI), or retail inflation numbers. This, despite the fact that the July CPI at 6.07 per cent is nowhere near the RBI’s comfort zone, given that the central bank is single mindedly pursuing an inflation target of 4 per cent, plus-or-minus 2 per cent for the next five years. Clearly, the gradual upsurge in inflation numbers is expected to slow down the pace or, at best, put a status quo on the interest-rate-easing cycle this year. Under Raghuram Rajan’s tenure, inflation had eased…