Globalising Indian companies

The decision of the Aditya Vikram Birla group's flagship company Hindalco Industries to acquire the U.S.-based aluminum products maker, Novelis Inc at an estimated $6 billion is an enormously significant development. Coming less than a fortnight after the Tatas closed their nearly $12 billion deal with Corus, the AV Birla group's move reinforces a trend that is making a large number of Indian companies world champions in their fields through acquisitions. The significance of Indian companies taking over European and American companies and reaping substantial synergies in their global operations can hardly be overstated. Indian MNC's are now gaining the willingness and ability to reap the rewards of globalisation. Having first met the challenges of fierce global competition with limited resources within the country, they are now taking the battle into the most advanced markets. While earlier many Indian companies were targets for takeovers from abroad, today they have become acquirers themselves. After the acquisition, Hindalco's turnover will almost double and the AV Birla group will be poised to enter the list of Fortune 500 companies. That would fit into the vision of the late Aditya Vikram Birla, who more than 35 years ago led his group into becoming the first truly Indian multinational.

From the outside, interest in the Indian economy continues to rule high and the British telecom giant Vodafone is all set to own a majority stake in Hutch-Essar, India's fourth largest mobile telephone company. The protracted battle to acquire the 67 per cent stake held by the Hong Kong-based Hutchison Telecom and the mind-boggling valuations — the Indian company has been estimated to have an enterprise value of $19 billion — speak of the attraction the size of the Indian market holds. Many of the industries and services that are today flourishing and defining the country's outward thrust did not exist in the pre-reform era. Mobile telephony has been one of the great success stories, with the number of connections — currently placed at round 156 million — expected to grow exponentially to reach 210 million by 2008. Opinions may differ on whether in both the transactions — Hindalco's as well as Vodafone's acquisitions — the price paid was right and whether the projected benefits will in fact accrue. Yet, the bigger picture should not be lost sight of. As Mr. Kumaramangalam Birla pointed out recently "India is back in the stream of global consciousness." A great deal of credit should go to the spirit of entrepreneurship of Indian businessmen and their willingness to think big.

IT-enabling to reduce corruption

Recently i read an article in "The Hindu" in which a house maid,who recently lost her husband,filed an application for Rs.200-a-month allowance in the taluk office under Vidhawa Vethana — the Karnataka Government’s social security scheme for widows. She was shocked when a government official demanded a bribe of Rs.150. When she offered Rs.50, the official shot back that he was not a “beggar!” Of course, he is! What else can he be? Before this, disgracefully,nurses in a government hospital in Bangalore demanded Rs.100 to 200 each time they shifted the housemaid’s husband, who was in severe trauma, on to the hospital bed! It is a disgrace that no one is spared from the cancer of corruption and moral bankruptcy.Public outcry against corruption is increasing but the impact is minimal. However, there appears some promise of reducing corruption through Information Technology-enabled services. IT is not a panacea but there is potential to minimise harassment of the kind the housemaid faced.

Andhra Pradesh government(To say correctly,Chandrababu naidu)introduced the concept of eSeva in 1999.It is an interesting insight into the impact of IT-enabled government services.eSeva is a public-private partnership programme to provide one-stop services,such as bill payment, and issue of licences, birth/death certificates, etc., to citizens. The actual delivery of services is done through private franchisees compensated on the basis of the volume of transactions. The incentives are structured to provide service with courtesy and minimal delay. Of course,eSeva is still a long way from reaching all the citizens. However, its progress since 1999 has been remarkable. Over 61 million transactions have been processed through eSeva centres. It is believed that eSeva has improved service delivery and citizen satisfaction,and reduced corruption.The lesson is that there are opportunities to reduce corruption by reengineering and digitising government processes, minimizing direct contacts between the government and citizens, establishing appropriate controls and audit, institutionalising transparency and accountability, and privatizing government-citizen interactions with appropriate incentives and controls.

There is a business jargon “Don’t automate, Obliterate”.Firms should obliterate the existing ways of doing business, simplify processes, eliminate non-value added tasks, and innovate to improve speed, quality, and service. Simply automating the existing inefficient processes with IT provides no meaningful productivity improvements.On similar lines, to reduce corruption in government services, we need to eliminate unnecessary government-citizen interactions! The potential for corruption increases when there are face-to-face interactions.Electronic interaction can obliterate them and leave a trail for potential audit. But the focus should not be on IT itself, but on how the government carries out various activities,i.e processes. IT is a means and not an end in itself. Research suggests that the value from IT comes mostly from process improvement and incentive alignment. Thus governments may need to give more importance to processes than to IT itself.Complex processes with enormous paperwork increase the potential for corruption.The more the paperwork and number of steps, greater are the opportunities for brokers (consultants?!) to step in to get any work done in government offices. Some of these brokers are hand-in-glove with officials and become conduits for organised corrupt practices.Performance metrics have less meaning since blame is passed on to others.Further, recognising the inefficiencies or potential loopholes, private citizens may themselves become party to corrupt practices.

One of the greatest benefits of IT is enforcing queue in the system. A well-known political scientist once said queues inherently represent equality and when people do not perceive equality, they break queues. Sadly, people with money, connection, or power perceive others to be unequal and tend to break queues more readily! IT will force applications to be processed in the order of arrival. It can enforce multiple queues with different priority levels based on the willingness of applicants to pay a premium for the service. In a non-IT system, willingness to pay or accept payment is played out through bribes. One can debate whether government services should have different levels of priorities at all since the system will be inherently biased towards the wealthy.However when processes are simplified,controls may be compromised. Fortunately,digitisation enables us to enforce rules and bring transparency. If a case is not processed within a certain time, the system can automatically trigger a notification for higherups.What if the higher-ups are corrupt? The government can make the status transparent so that non-governmental organizations or the media can report delays.

In fact, citizens should be able to post delays and corrupt activities for the public to view. The government must provide a conduit for people to voice concerns, corruption, or compliments.Of course, corrupt citizens can use this conduit to abuse honest officials and, therefore, there is need for checks and balances.Controls and metrics are necessary and the government has an obligation to make high-level aggregate information public. For instance, a government dashboard for each organisation may publicly list the number of cases in the queue, average processing time and its distribution, and the number of delayed cases. Organisational leaders must be evaluated on these metrics. These metrics can be derived from the system automatically.So there is little leeway in tampering with data.

Need for political will and vision But the above is easier said than done.Even in the corporate world, a large majority of reengineering projects have failed for mostly non-technical reasons. There will be significant resistance from unions, governmental agencies, and powerful brokers who benefit from inefficiencies and have vested interest.Service transformation will impact power structure, employee morale and skills, departmental boundaries, job security, information control, and incentive structure.Therefore, much like in a business environment where top management support impacts the success of reengineering and IT initiatives, there is need for strong political will and vision to make this transformation.Of course, there are economic issues to be considered. IT is expensive to create and manage. Often, the focus is upfront cost in creating information systems. However,over 70 per cent of the life-cycle cost of the system goes into maintenance.

Furthermore,a large fraction of the population has no education or access to interact electronically.Thus, governments may run an expensive system to meet the demands of a small population and a parallel expensive, manual,and inefficiency-riddled system for the masses.In the short run, the cost will go up. Therefore,governments must pursue public-private partnership where the private partner will invest and share some risks and reach the citizens with appropriate incentives,checks and balances. This does not mean that the governments outsource social responsibility to the private sector. But this is a way to bring market efficiency and better accountability. It is relatively easier to address inefficiencies with private agencies than to deal with corrupt government officials.Further, privatising the actual delivery will eliminate the main source of corruption — that is, government-citizen face-to-face interaction.

ISRO makes a comeback

Six months ago, there was gloom when the Geosynchronous Satellite Launch Vehicle(GSLV) failed in flight after an engine malfunction. Now, the
nation and the Indian Space Research Organisation have good reason to cheer. The Polar Satellite Launch Vehicle (PSLV), the workhorse launcher of the Indian space programme that had already flown eight consecutive successful missions, has once again turned in a flawless performance. On Wednesday, the PSLV launched India’s most advanced earth-observation satellite, the country’s first effort at a recoverable capsule,and two small satellites for foreign customers. ISRO has not limited itself to building increasingly more sophisticated earth-viewing satellites; it has played a key role in establishing the capability within government and industry to utilise the images from space for practical ends. When IRS-1C was launched in 1995, its black-and-white images were capable of picking up objects just 5.8 metres across; they also offered the highest resolution satellite images that were commercially available at the time. Cartosat-2, which has been launched by the PSLV, will provide images with a resolution of less than a metre, which means they are suitable for many town planning activities, mapping,and several other applications.Two scientific tests are to be conducted aboard the Space Capsule Recovery Experiment (SRE-I) under very low gravity conditions that prevail as it orbits the earth. After several days in space, the capsule will, on command from ground stations, fire onboard rockets to reduce its speed and make a controlled re-entry before splashing down in the Bay of Bengal. The Soviet Union and the United States first developed recoverable space capsules for film-based spy photography. Since 1975, China has successfully launched several recoverable capsules for microgravity experiments as well as for photography. Should India opt for a manned space programme of its own, ISRO will find its experience in re-entry with recoverable capsules invaluable.

Cricket lessons from South Africa tour

The disappointing end to the Indian cricket
team’s tour of South Africa was an outcome of
flawed decision-making, poor tactics, and a
defensive mindset when it came to the endgame.
On an India-friendly pitch , Rahul
Dravid’s men dominated the match for three full
days and more. But when the prize seemed within
grasp, on the fourth afternoon, the visiting team shied
away, as if afraid of a famous first, a series win in South
Africa. The defensive mentality — exemplified by the
rut that Sachin Tendulkar (69 deliveries for his 14) got
his team into in the second innings after a winning
platform had been constructed — was quite inexplicable.
On the other side, the home team displayed impressive
tactical flexibility and courage in the face of
adversity. The contrast in mental approach between
the aggressive Smith-Pollock partnership and the stagnant
Tendulkar-Dravid pairing proved, in the end, to
be the qualitative difference between the two teams.
There were, of course, some bright features amidst
the gloom of the series loss. Rarely has India travelled
overseas with a bowling attack capable of destroying
the opposition’s batting. It unearthed a man for that
task in Sreesanth (18 wickets at 21.94), who forged a
fine pace alliance with a resurgent Zaheer Khan. The
young man from Kerala showed the kind of disciplined
aggression that pays on the big stage, a quality Team
India displayed in good measure under Sourav Ganguly
not long ago. For Ganguly himself, the tour marked a
creditable comeback while young Dinesh Karthik displayed
impressive character and skills both behind the
stumps and in front. Surely, it would be hard to leave
him out of the reckoning in India’s Test eleven. If the
chief lesson for Team India was the need to discard the
defensive mindset, the International Cricket Council
urgently needs to address the issue of declining umpiring
standards. The quality of officiating in the Castle
Test series was decidedly unsatisfactory, even though
it must not be allowed to become an excuse for India’s
series loss. In a sense, it was just as well that Team
India managed to snatch defeat from the jaws of victory
in South Africa. Victory might have helped paper over
the serious weaknesses of Indian cricket, notably the
decline in the top order batting (once, arguably, the
best in the world) and a strange loss of team management
confidence in spin, evidenced by the otherwise
inexplicable preference of an out-of-sorts Munaf Patel
to Harbhajan Singh at Newlands. The time to tackle
these serious weaknesses is now and neither reputation
nor seniority should be allowed to come in the way.

It's how they run the house

The winter session of the Karnataka Legislature, as was the case last year, is off with the Government likely to opt for a brief session of the Legislature after the Sankranthi festival. The next session is scheduled to commence on January 19, tentatively.

This would translate into the Government holding sessions of the legislature for just 51 days in the current calendar year which is almost the same as that of last year when the session was held for 50 days.

It also means that the Karnataka Conduct of Business in the State Legislature Act 2005 which stipulates that the Legislature should meet for at least 60 days in a year stands to be dishonoured in the very first year after the legislation was enacted.

The legislation was enacted primarily to ensure that the Legislature met at regular intervals akin to Parliament — an opening session of 15 days, a budget session of 20 days, a monsoon session of 15 days and a winter session of 10 days.

"The legislation is not an advisory but a law which has to be strictly adhered to by the Government. Section 4 of the Act has imposed an obligation on the Government to recommend legislature sessions for 60 days,"
The total working days for them in a year is just 60 days that too was enforced by law(During the S.M.Krishna period it was just 40 days),and these politicians can;t run the legislature even for the same number of days.And for these they get quarters,vehicle,human resources,salary too(sometime they demand the salary is not on par).Shame on you politicians.shame on you.

Well done Mr.Kumaraswamy

Roughly 6 months ago the chief minister of karnataka Mr.Kumaraswamy,visited B.T.M layout in bangalore.Residents of B.T.M gheraoed him for the very bad condition of the roads and the increased traffic and noise levels.Mr.Kumaraswamy promised all these problems will be addressed once the over-bridge at the jayadeva junction is over.Everybody thought that as a politician's promise.But Mr.Kumaraswamy kept his word and the roads all around B.T.M are re-laid and are shining now.The heavy vehicle traffic is also blocked in the 29th main of B.T.M .As a resident of B.T.M layout i thank Mr.Kumaraswamy for his sincere efforts meeting almost all the demands made by the people.Keeping one's own word in politics has become a rare virtue now-a-days and in this case you have proved that you have it Mr.CM.A work well done sir.