Enterprise &Economic Update Kerala

Vol 2, Issue 10 December 2012

Let the sun rise RNI No. KERENG02297

Editor K J Jacob Executive Editor Aby Abraham G K Principal Correspondents A P Jayadevan Kuruvilla Chacko Senior Designer Renu Arun Website Suhas K Sales and Marketing Jose Thomas Printed, published and owned by K J Jacob and published from Independent Media, XI/173 B, Mulakkampallil Buildings, Kunnumpuram-Civil Station Road,Thrikkakkara, Kochi,Kerala-682 021 Phone: 0484-2421916 and Printed at Sterling Print House Pvt.Ltd. Door No: 49/1849, Ponekkara-Cheranelloor Road, Aims Ponekkara P.O., Kochi - 682 041 Phone : +91 484 2802522, 2800406 *Editor: K J Jacob For subscription, advertisement : sales@economic-update.in Tel: +91 99475 39023 We value your feedback.

Please write to us at: letters@economic-update.in Read us at www.economic-update.in Cover design : Anoop Radhakrishnan

*Editor responsible for selection of news under the PRB Act.

I

t is an idea that is shining bright even during power cuts: harnessing the sun’s energy for making electricity. Gone are the days when solar power was expensive, and used to power just spaceships and satellites. Economies of scale, better technology, the rise in price of competing fuels and environmental issues are making it more acceptable and affordable.

Its advantages are many. Solar power is abundant, renewable, non-polluting and reliable. Solar power systems can be set up in no time unlike other sources of electricity, and that too in a wide range of capacities. Operating costs are minimal and so too is maintenance. And you can escape power cuts and price hikes that are regular features today.

Many States are taking to it. Gujarat, for example, has installed 600MW solar power capacity in the last couple of years. West Bengal has 2.38 lakh houses that use solar energy as primary source for lighting, followed by Uttar Pradesh (1.56 lakh) and Bihar (1.09 lakh).

But sadly, Kerala is still waiting for the rains. The view that solar energy is not suited for Kerala, where rains take over the show for three months, doesn’t hold much water. Much like our dams today. Germany, a country which receives much lesser sunlight than our State, on account of its location, far away from the earth’s equator, today generates 28GW of electricity from solar sources. True, our State doesn’t have large open spaces needed for setting up big solar plants. But our rooftops are more than enough as shown by the enterprising few who have reached for the sun. Solar energy would be an ideal complement to the hydro-electric plants that power our State today.

The need of the hour is an enabling policy which promotes the use of solar energy. Allowing grid connectivity to rooftop solar PV systems (that would do away with the need for expensive batteries), and a facility to buy extra power produced by them would reduce the cost drastically and trigger its adoption.

The solution to our power problems is out there in the sun. And it will be available forever; at least till the sun shines.

So what are we waiting for?

Contents COVER STORY

34 Warming up to the sun Businesses in the State have started warming up to the sun. And they are finding the switch to solar electricity financially rewarding too

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15 A 100 billion empire The Tata group becomes the first Indian company to cross $100 billion in revenue

26 For a Kerala Brand The IT policy 2012 seeks to promote entrepreneurship and build a Kerala brand

18 The Co-operative Corporate Uralungal Labour Contract Co-operative Society, a workers’ cooperative, is building a `600 crore IT park in Kozhikode

28 Direct to home From now on, subsidies will reach your bank account as Centre launches direct cash transfer

Contents 40 Art for leisure Kochi-Muziris Biennale is expected to give a major fillip to Kerala tourism with half a million people expected to visit the sub-continent’s biggest art event

32 Schedule it right A new software that generates bar bending schedule in pictorial form can help cut costs

21 Nature’s farm Zero Budget Natural Farming helps bring down input costs and increase yield

44 Hunt with the hare Entrepreneurs must shed their ego if they want to pick right candidates, writes Krishna Kumar 46 Future solutions Open source software holds out promises for the future, writes S R Nair 50 Gently down…

Scheme for those who are yet to enter the world of equities 54 Fruitfully dry Dry fruits and nuts help you stay healthy. They are the best substitutes for spicy snacks The Other Side 52 Securing your food Building purchasing power, not self reliance the best option, writes Aby Abraham

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The big picture

India’s first IT park, Technopark, Thiruvananthapuram has completed the master plan for its fourth phase expansion – the Technocity. The project is coming up on 431 acres of land at Pallippuram, near Thiruvananthapuram. When complete the Technocity will be an integrated IT township, encompassing IT/ITeS infrastructure, residential 6

apartments, shopping malls with multiplexes, hospitals, hotels, educational institutions and other support facilities. With a planned built-up space of 30 million sq ft and an investment of `5,000 crore, Technocity dwarfs all the other IT projects in the State today. It is indeed the smartest of them all â– 7

It’s heartening to note that the young generation in Kerala is looking at entrepreneurship with a renewed vigour. This augurs well for the State. Till now, we used to export our brilliant youngsters to different parts of the world and lived on their remittances. For some, there was hardly an option, but for many, they could have succeeded here as well. I am sure that the young entrepreneurs will create history with their ventures.

B N Nair, Kochi To become an entrepreneur was tough in the past as it required a lot of capital investment. Today, anyone with a smart idea can become one.

And there are moneybags to promote their ventures. This is an opportunity the older generation did not have. It’s for the government to nurture the entrepreneurial talents by creating an enabling ambience. I welcome the government decision to offer grace marks for the young entrepreneurs. Now, parents also must come forward offering emotional support in their struggle.

Prof T K Thomaskutty, Kochi The government’s plan to set up an airline company is welcome. True, it is fraught with dangers, and the chances of a failure are bright. But this is the need of the hour. It will save the non-resident Keralites from the harassment of the airline companies. There are a lot of people who are willing to put in their hard earned money in the venture. Most of them are not looking for an immediate profit, but are doing so 8

because they want the airline to be a symbol of their pride. All that the government has to do is to put in place a team of professional managers for the new venture and run it as a commercial enterprise.

Ramesh Govind, Thiruvananthapuram The Kerala government’s move to set up an airline company sounds foolish. It’s a tightrope walk for airline companies all over the world.

Only few that thrive do so because of very deft management; all others have gone down, and in the process, they have dragged down their owners also. The failures of companies such as Kingfisher, Sahara and Air Deccan tell the same story.

The story of Air Kerala cannot be different.

Paul Jose Thrissur

Investment and industries are needed for the development of all societies. However, Kerala has to approach it from a different perspective. The State which hosts one of the 25 biodiversity hotspots has a very fragile ecology. Any attempt to tinker with it must be resisted.

Instead, it should strive for the intelligent and moderate exploitation of natural resources to create wealth.

The government must take steps to forge partnerships with world-renowned companies in the bio-technology sector and set up institutions in the State. It’s not a brilliant idea to forget about the bounty, nor is it to leave it to the private sector.

Dr Saji Varghese Kottayam

The response Emerging Kerala has evoked points to the fact that Kerala holds a lot of potential as a business destination. I am happy that the meet provided our industry leaders an opportunity to look closely at the prospects of Kerala and take informed decisions. Though the meet did not witness grand announcements and declarations, it did pave the way for future ones. I am sure that the government will do a thorough follow up of the event.

P V Nishad, Kochi

Business meets essentially offer a platform for decision-makers to come in contact with one another and think of the future. I hope the Emerging Kerala Meet offered such an opportunity. However, I would have preferred a more focused approach to the meet by selecting a few areas in which Kerala holds real potential and ensuring the presence of the industry leaders in them. I hope the next edition of the event would be more fruitful.

Premlal Ramachandran, Thiruvannthapuram

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I say!

Ernakulam was the first district in the country to achieve 100 per cent family planning in 1970s. In 1990, Ernakulam was declared the first district to have 100 per cent literacy. Today is the third step in the process‌ Ernakulam is becoming the first district in the country to achieve 100 per cent financial inclusion Dr D Subbarao, Governor, Reserve Bank of India, speaking after declaring Ernakulam the first district in the country to achieve meaningful financial inclusion

"Kerala should come up with an entrepreneurship policy which we don’t have now. We can even minimise government involvement. It would be a big challenge and Kerala can be a model for the same" Sam Pitroda, National Innovation Council Chairman, addressing delegates at TiECon 2012 "An NIM (net interest margin) of 3 per cent is good for the economy. When a businessman is borrowing, he always looks at the rate of interest to decide on the viability of the project" P Chidambaram, Union Finance Minister, asking chief executives of State-owned banks not to be obsessed with higher margins and instead attract borrowers with lower interest rates

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"Our youth have to become more confident; parents and leaders of society have to support youngsters to take risks and our society has to accept failures in businesses which do happen in a competitive world" Oommen Chandy, Chief Minister, while inaugurating TiECon 2012 at Kochi "The government’s has decided to say no to investments if the projects are polluting. The Industries Department would also keep off from promoting such projects" P K Kunjalikkutty, Industries Minister, on the clearance to projects presented at the Emerging Kerala Meet

AT A GLANCE

Mark Carney to be Bank of England boss

Mr Mark Carney, governor of the Bank of Canada, will succeed Mr Mervyn King as head of the UK’s Central bank in July. The 47-year old Canadian will be the first ever foreigner to run the 318-year-old Bank of England. Named Euromoney’s ‘Central Banker of 2012’, Mr Carney did not apply for the post, but was wooed by UK Chancellor of the Exchequer Mr George Osborne to take up the job, impressed by his unique blend of experience in banking, policy making and regulation. A graduate from Harvard and a doctorateholder in economics from Oxford, Mr Carney worked for Goldman Sachs for 13 years.

Moody’s cuts France’s rating Moody’s rating agency which had put France on negative outlook last February, stripped it of its Triple A sovereign creditrating. Standard & Poor’s had taken a similar step much earlier. Moody’s cited the country’s deteriorating long-run economic prospects due to persistent structural economic challenges, rigidities in labour

and services markets, low levels of innovation, a sustained loss of competitiveness and the gradual erosion of its export-oriented industrial base for the downgrade.

Online sales hits record on Cyber Monday US consumers spent about $1.46 billion on Cyber Monday, compared with $1.25 billion a year ago, making it the heaviest online spending day in history. Cyber Monday is the Monday after Thanksgiving Thursday which marks the Christmas shopping season.

More than 18 per cent of shoppers used a mobile device to access a retailer’s website, an increase of 70 per cent over 2011, according to an IBM report.

The Black Friday sales had also hit a high with $1.042 billion on Friday, up 26 per cent from last year.

South African GDP growth slows to 1.2% Struck by strikes in its gold and platinum mines, South Africa, Africa’s largest economy, slowed down recording just 1.2 per cent growth in the third quarter, compared to the previous quarter when it grew 3.4 per cent.

This is the slowest growth rate since the recession in 2009. Finance Minister Pravin Gordhan has forecast a growth rate of 2.5 per cent this year, down from the 3.5 per cent recorded in 2011.

Chinese industrial company profits surge Signs that China, the world’s second largest economy, is recovering from a seven-quarter economic slowdown were strengthened with profits of Chinese industrial companies’ surging in October and turning positive for the year. Profits had risen 7.8 per cent in September marking the first gain in six months. The Chinese economy grew 7.4 per cent in the third quarter, the slowest pace in three years.

Rolls-Royce expands in Asia The economic crisis has not affected the plans of ultra-luxury car brand Rolls-Royce. The company plans to increase outlets by 14 per cent in the next five years to cater to the growing numbers of wealthy customers. The company is counting on the growing wealth and wealth concentration in Asia and South America to fuel demand. It hopes that the updated version of its $380,000 Phantom sedan will help it best its record of 3,538 cars sold in 2011. Its special edition $1.2 million Year of the Dragon Phantom model launched in China this year was sold out in just two months.

Dubai plans new city, largest mall Dubai has announced a project to build a new city

and the world’s biggest mall. The ‘Mohammed bin Rashid City,’ named after the ruler of Dubai will be built by Dubai Holding and Emaar Properties, which developed many of Dubai’s prestigious projects, including Burj Khalifa. The ‘Mall of the World’ will have a capacity of 80 million visitors. A family entertainment centre aiming to attract six million visitors a year will also be developed in cooperation with Universal Studios International. Dubai already hosts the Dubai Mall, arguably the world's largest shopping, leisure and entertainment destination, which attracted 62 million visitors this year.

California economy rebounds, deficit down California, the largest US State in terms of population and GDP, is showing signs of a rebound. Unemployment fell to 10.1 per cent last month, from 11.5 per cent reported in October 2011, the lowest level since February 2009.

The housing market too is showing signs of life with homes selling at higher prices, and new home construction rising.

The budget deficit for next year is projected to be $1.9 billion, down from a high of $25 billion.

The turnaround in California is good news for the country given that it is the State with the biggest economy in the US. 11

AT A GLANCE

Moody's says India’s rating outlook is stable Rating agency Moody’s says that the outlook on its Baa3 rating for India is stable, thanks to the country’s large and diverse economy, high savings and investment rates and strong GDP growth. But it also cited India’s poor social and physical infrastructure, high government deficit and debt ratios, recurrent inflationary pressures and an uncertain operating environment as risks to the rating.

Standard & Poor’s had warned India of a credit rating downgrade over the next 24 months. Fitch also has a negative outlook on India.

Diageo set to take over Mallya's United Spirits

British drinks major Diageo, which makes Johnnie Walker scotch whiskey and Smirnoff vodka, will take significant ownership and management rights in Vijay Mallya's United Spirits Limited (USL).

Mr Mallya will retain a stake and continue as chairman of USL. The deal will give Diageo access to USL’s brands such as like Bagpiper, Royal Challenge and Signature which together command over 50 per cent share of India’s branded liquor sales. The mounting debts of Mr Mallya's Kingfisher Airlines provided an impetus to the move.

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Mahindra hopes for quick Aston Martin deal Mahindra&Mahindra is leading the race to buy a 50 per cent stake in Aston Martin, the British sports

car-maker made famous in James Bond movies.

Kuwait’s Investment Dar had bought the luxury brand from Ford in 2007 for $925 million then.

But the firm’s value has eroded since then and major car-makers did not show interest in the firm.

Mahindra’s bid is unlikely to top $400 million. The deal will give Mahindra an iconic brand and a toe hold in the car markets abroad.

Centre puts more PSUs on the block The government seems to be in a hurry to achieve its target of `30,000 crore through disinvestment in the current fiscal. After mopping up `808 crore by divesting 5.58 per cent stake in Hindustan Copper, the Department of Disinvestment has initiated the process of disinvestment of 10 per cent of its stake in NMDC and 9.3 per cent in MMTC. It has also invited bids from merchant bankers for 9.5 per cent stake in NTPC. The stake sale in NTPC will bring down the government holding in the company to 75 per cent and is expected to fetch

more than `12,000 crore.

Next in the line is Nalco, for which the Cabinet has also approved as sale of 12.1 per cent stake.

ticipating interest in the field. The acquisition will help OVL offset the drop in production from Sudan and Syria.

2G spectrum auction flops The Union government was able to raise only `9,407 crore in the muchhyped 2G mobile phone spectrum auction. The government had expected a minimum of `40,000 crore from the auction after it fetched `67,719 crore by auctioning 3G spectrum in 2010. The government had hoped to earn `28,000 crore from GSM spectrum and the rest from the CDMA, but there were no takers for CDMA spectrum as both Videocon and Tata Teleservices backed off. Only 101 out of 144 blocks of spectrum on offer received bids.

Adlabs builds `1600 cr theme park Adlabs founder Mr Manmohan Shetty is building a `1,600-crore theme park – Adlabs Imagica – on a 300-acre plot on the Mumbai-Pune Expressway. The first phase coming up on 110 acres will have about 21 international standard rides including the country’s largest roller coaster and 4D stimulation rides. It is scheduled to open to the public by March next year, with entry prices expected to be `1,500. The park hopes to attract 3 million visitors in the first year. A consortium of 14 banks will finance two-thirds of the project cost.

OVL to buy Kashagan stake; biggest ever ONGC Videsh Ltd (OVL) will acquire 8.4 per cent stake held

by ConocoPhillips in the Kashagan field off North Caspian Sea. The $5 billion deal is OVL’s biggest acquisition ever.

The Kashagan field is the world’s largest current development project. Eni, Total, Shell, ExxonMobil and KazMunaiGaz each hold 16.81 per cent par-

Reliance, Lanco, NIIT for big deals in China India and China signed 11 pacts in an effort to boost trade. Of these the private sector accounted for deals worth $5 billion.

Reliance Power signed an MoU with Guangdone Mingyang Wind Power Industry Group Co Ltd for a 2,500 MW renewable energy project envisaging an investment of $3 billion. Lanco Group entered into an agreement with the China Development Bank for financing $600 billion while NIIT will set up an IT technology park in Hainan with an investment of $800 million.

AT A GLANCE

IBS acquires US hospitality firm HBSi

Thiruvananthapurambased transportation software maker IBS Software Services has acquired Hotel Booking Solutions (HBSi), US-based B2B travel technology and services firm, in a multimillion dollar deal. HBSi has over 80 multinational hotel chains including Starwood, Harrahs, Raffles, Ramada, Fairmont and Kerzner and 30 leading distributers such as Expedia, Orbitz and Travelocity on its client list. The deal is part of IBS’s strategy to expand its solution portfolio to cover travel, hospitality and aircraft engineering areas. The company has made six strategic acquisitions - one in India, two in Europe and three in the USA - in its 15 year history.

Kudumbashree to train entrepreneurs in Bihar The Kudumbashree Mission has signed an MoU with the Bihar Rural Livelihood Mission (BRLM) to provide entrepreneurship training to people in Bihar. The MoU was signed by K B Valsala Kumari, head of the Kudumbashree Mis-

sion and Aravind Kumar Chaudhary, Secretary of BRLM in the presence of Union Rural Development Minister Jairam Ramesh. As per the MoU, Kudumbashree will train 200 people from Gaya and Muzaffarpur. Of them, 30 people would undergo a rigorous seven-month training, while the rest would be given application-oriented training. They would in turn train 64,000 people in the Bihar under the BRLM. LOTS Shipping launches river sea container vessel Kochi-based LOTS Shipping has launched its first river sea container vessel, marking its entry into coastal shipping. The IRS class type-IV river sea vessel – M V Beypore Sultan, was constructed

by Master Shipyard Pvt Ltd, at Edakochi at a cost of `12 crore. The river sea vessel which can operate both in the sea and in the inland waterways will provide seamless connectivity between the seaports and the inland and upcountry destinations in the State, thereby reducing the cost and time required for transporting cargo. LOTS Shipping intends to deploy it on the Kochi – Mangalore stretch, serving the minor ports in Kerala.

The service is expected to be a boon for the exim trade in the region. The company plans to induct 10 coastal river sea vessels to meet the expected demand in coastal shipping

in three years.

The ship can carry 81 twenty-foot equivalent units (TEUs). Ports Minister Mr K Babu who launched the ship announced a subsidy of `1 for transporting a tonne of cargo through water for a kilometre.

Chartered flights, cruise ships start arriving

Kochi is emerging as a cruise destination, thanks to its inherent advantages such as the presence of an international airport, efficient Customs and Immigration clearance systems, the availability of good supplies, and tourist locales in the hinterland.

After Celebrity Solstice, a mega cruise liner visited the port with 2,800 tourists and 1,250 crew members in the third week of November, the city played host to Aida Diva – a German cruise liner which uses the port for its turnaround operations.

The 1,462 German tourists who boarded it from Dubai alighted here and left for their home country from Kochi on board chartered flights. On these flights came 1,516 highspending tourists from Germany, who checked into Aida Diva. The port expects a total of 50 cruise ships to call at Kochi this tourist season.

KMRL to build 18-acre Business District The State government will hand over 18 acres of land at Kakkanad to Kochi Metro Rail Limited (KMRL) to construct a business district, which will part-fund the Kochi Metro. A meeting of officials chaired by Chief Secretary Mr K Jose Cyriac made the recommendation to the State Cabinet, which is expected to give its approval soon.

The ‘business district’ project, which will bring the biggest shopping and entertainment centre in the State at Kakkanad, will be implemented along with the Kochi metro rail project by KMRL. It was originally suggested to build the business district on 35 acres of land, but now the portion of land on which the NGO flats are located has been omitted. The land will be handed over free for a 15 year period.

SpiceJet to launch more services from Kochi

SpiceJet has announced two new daily international flights from Kochi.

It will start service on the Kochi-Male route on November 29 and the Kochi-Dubai flight will start operations on December 10. Booking for tickets on these routes is now open.

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project tracker

DMRC to help build Kochi Metro The pressure applied by the State government for the Kochi Metro project yielded some results with the Delhi Metro Rail Corporation (DMRC) agreeing to participate in the project. After holding talks with Chief Minister Mr Oommen Chandy and Delhi Chief Minister Ms Sheila Dikshit, Union Urban Development Minister Mr Kamal Nath announced that DMRC will “participate and give support” for the construction of the Kochi Metro without affecting the ongoing works

of the Delhi Metro. DMRC’s role is expected to be limited to giving technical advice and working as a consultant without being involved in day-to-day activities of the Kochi Metro project.

GAIL gearing up for pipeline project The State government has assured GAIL Ltd that it will expedite the notification of the market value of the land identified for the second phase of the 505-km Kochi- Koottanad-Bangalore-Mangalore gas pipeline project. GAIL will pay 10 per cent of the market value to the landowners for the right to use land for laying the 30 inch pipeline, 1.5 14

m below the ground level. The landowners will retain the ownership rights and farmers could continue to cultivate the land subject to some restrictions. In addition, 18 acres of land would be acquired in the stretch to set up SV stations and IP stations. “We expect the process to be completed in a couple of months, clearing the way for laying the pipeline,” Mr RP Goyal, Director (Projects), GAIL said after meeting Kerala Chief Secretary to review the work. The first phase of the pipeline project covering 48 km had been completed at a cost of `260 crore.

Kochi refinery expansion gets eco-clearance The Union Ministry of Environment and Forests has given its nod to BPCL-Kochi refinery’s Integrated Refinery Expansion Project. The company had earlier inked license agreements with Stone & Webster of the USA for the fluidised catalytic unit; with Lummus Corporation, USA, for a delayed coker unit; with Halder Topsoe of Denmark for a diesel hydro-treater unit and with Shell for a vacuum gasoil hydro treater unit as part of the project.

Slated for completion in December 2015, the project is estimated to cost around `14,000 crore. It will increase the capacity of the refinery to 15.5 million tonnes a year from the current 9.5 million tonnes, making it the largest public sector refinery in the country. The expansion will enable the refinery to produce Euro III/IV compliant auto fuels and value added petroleum products such as propylene and its derivatives.

BPCL has already tied up with LG Chemicals to set up the first petrochemical complex in Kerala at a cost of `6000 crore, using these products as the raw material. It has also signed an MoU with the State government for the same.

HAL commissions strategic electronics factory Hindustan Aeronautics Ltd’s strategic electronics factory at Seetamgoli in Kasargode District was inau-

gurated by Defence Minister A K Antony. The first phase of the factory set up at a cost of `66 crore will produce advanced Avionics for Aircraft and Helicopters in the Defence Sector. Mr Antony said that the second phase of development is on the anvil and communication equipment for Sukhoi-30, and Jaguar fighter planes will be produced in the factory. The construction of the factory had started in 2008. The

state government had allotted 196 acres of land for the new plant.

Consultants reviewing Kannur airport DPR The new consultants — a consortium led by the Hong-Kong-based AECOM Asia Private Ltd –have started reviewing the detailed project report for the Kannur international airport, prepared by the Cochin International Airport Ltd. The final DPR was prepared taking into consideration over a dozen technical flaws which aviation experts pointed out including likely cost escalation in view of earthwork, laying a second parallel runway and providing access to the airport from the Kannur-Mysore road. AECOM, global provider of technical and support services to airport owners, investors and aviation clients, came ahead of the Spain-based consortium INECCO in bagging the contract. AECOM has been involved in many major works in the aviation sector, including development of Los Angeles International Airport, O’Hare International Airport in Chicago and John F Kennedy International Airport’s American Airlines Terminal Redevelopment Programme. The project consultant will finalise and freeze the master plan, KIAL sources said.

A 100 billion empire

A 100 billion dollars! That is what the Tata group has achieved as revenues in the last fiscal. In the process, it became the first Indian business house to attain the mark “Do you mean to say that Tatas propose to make steel rails to British specifications? Why, I will undertake to eat every pound of steel rail they succeed in making,” Then chief commissioner for the Indian Railways Sir Frederick Upcott

F

rom steel to salt to software to gobbling up iconic British brands, the Tatas have come a long way in the last 140 years.

And India’s largest business group has now achieved a unique feat of the revenues crossing $100 billion.

For the financial year 2011-12, the group revenue was $100.09 billion, an increase of 20 per cent from the $83.3 billion in the previous year.

But net profits of the group fell 9.4 per cent to $5.23 billion during the year. In rupee terms, the group’s total revenue rose to `4,75,721 crore, while profit after tax fell to `25,112 crore in the year. The group turnover which stood around `50,000 crore in 2001-02, had crossed the `1,00,000 crore mark in 2006-07.

Started in 1868 as a trading firm

by Jamsetji Tata, the Tata group has been synonymous with Indian industrialisation. It is credited with starting Asia’s first steel plant in 1907. The group flourished under JRD Tata, who was its chairman from 1938 to 1991. Under his leadership, the group pioneered India’s aviation sector by starting Tata Airlines - which later became Air India - in 1932. And its entry into software with TCS, India’s largest software company, today.

The nineties saw the group restructure itself into a globally competitive entity under the chairman-

Jamsetji Tata, the founder; JRD Tata, the architect of big growth; Ratan Tata who expanded the empire; and Cyrus Mistry, the new boss

ship of Mr Ratan Tata. It met the challenges and grabbed the opportunities thrown up by the liberalisation of the economy. Tata Motors launched the Indica, dubbed India’s first indigenous car, in the decade.

And in the new millennium, the Tata group went truly global on the back of high profile acquisitions abroad which started with Tata Tea’s audacious acquisition of Tetley in 2000. The group has grown bolder since, acquiring Corus Steel in 2007 and Jaguar and Land Rover in 2008.

It has its sights on Orient Express, which runs an iconic chain of hotels and luxury trains, for which it has already made an offer. The Tata group is today a truly global corporation with operations in more than 80 countries across continents. As much as 58 per cent of the group’s revenues come from its international operations, a share that has been steadily increasing. The group’s international revenues have jumped from $4.4bn (27 per cent of the group’s total rev-

enues) in 2005 to 58.5bn today.

Sectors The group has operations in seven major sectors of the economy – engineering, materials, information technology and communications, energy, services, consumer products and chemicals. The engineering sector contributes 39 per cent of its revenues, followed by materials at 28 per cent and IT and communications at 16 per cent.

It has over 100 companies in its fold, including 31 listed entities. The major companies in the Tata fold include Tata Steel, Tata Motors, Tata Consultancy Services, Tata Power, Tata Communications, Tata Chemicals, Tata Teleservices, Tata Global Beverages, Titan, Voltas, Tata AutoComp Systems and Indian Hotels.

Head count The number of employees of the group also increased by 32,000 to touch 4,56,000 during the year. The group which pioneered many employee-friendly moves in the country such as the eight hour work day in 1912, leave with pay, and workers PF scheme in 1920, maternity benefits in 1928 and profit-sharing in 1934, has been a preferred employer for Indians for quite some time now. It also created national institutions such as the Indian Institute of Science, Tata Institute of Fundamental Research, Tata Institute of Social Sciences, etc.

The unique achievement came at a time when Mr Ratan Tata is all set to handover the chairman’s baton to Mr Cyrus Mistry, the 44-year old scion of the Pallonji family, the single largest shareholder in Tata Sons, the holding company ■ 15

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The Co-operative Corporate The 87-year old Uralungal Labour Contract Co-operative Society Ltd shows how labourers can become managers and create wealth

O

Kuruvilla Chacko

n a hot and humid Friday afternoon, while the rest of Kozhikode is shut down to celebrate Eid, a motley group of foremen, site managers, supervisors and labourers was seen sweating it out on the construction site of a multi-crore IT park coming up on the outskirts of the city. To the regular passersby, they may have been just labourers or contract workers toiling under orders to finish the project on time.

But they are not.

Many of them are the owners of the park they are building, while the rest are aspiring owners. As the work enters the final leg of the first phase, the park marks a major milestone in the history of the 87-year old Uralungal Labour Contract Co-operative Society Ltd (ULCCS), India’s first co-operative labour society.

Down the Years Formed in 1925 in Vadakara in Kozhikode district under the guidance of social reformer and orator Sri Vagbadananda, the society started off with 14 labourers. It had a steady but slow growth until 1967, when it accepted the by‐laws of the Labour Contract Societies of the Government of Kerala and got registered as one. Today, it has 1,100 members, apart from more than 2,000 contract workers.

Even the shift in its operations follows a similar trajectory as its worker strength. It all began with building a `925 platform on the Kozhikode beach for selling fish; 3,500 projects later, it undertook

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Workers who toil through the day are also the owners of the company projects worth `120 crore last year, and is now an accredited contractor of the State government and several national agencies. The `600-crore UL Cyber Park is its crowning glory.

Scheduled to be commissioned next year, the Park also has the unique distinction of being constructed, operated and managed by the society itself.

The Workforce So, what has been the backbone of ULCCS’s growth story? The question has just one answer: its unique worker-management mechanism.

Most of its labourers who sweat it out in the construction site as workers by day are, at its end, the company’s owners also, holding shares

and reaping profits in their own right. From the chairman and the members of board of directors to the supervisors, site engineers, vehicle managers and construction employees, all are workers enrolled with the society who have been allotted their line of duty and promoted purely on merit and experience.

The membership criteria are simple but tough: the applicant must be a person of concrete and steel, having worked his way through roads, bridges and buildings with its fellow members for a period of at least four years. In the past, the aspiring members were even asked to cut stones to prove their mettle. No wonder then that its workers are as much focussed on quality as much as they are on timely delivery.

Each employee gets his/her voting rights and shares depending on the class of membership into which they fall: Class A, B and C. Class A members are those based in Kozhikode and who have been with the society for a fairly long period; the Class C membership is open to all local labourers who have worked with the society for a period of at least four years. “Only Class A members have voting rights or can purchase shares in the company,” said Mr Rajan P K, site leader & vehicle manager, who got his class A membership recently after a service of more than three decades. Class B membership is reserved for government nominees.

Rights apart, the benefits members of both classes receive are similar. The daily wage has been at present fixed at `500 for men and `330 for women. Skilled labourers earn up to `700 depending on the type of work for a fixed eight hours a day. “Wages are paid for every extra hour to ensure that workers get a fair deal,” said Mr P K Suresh, director.

Each member has PF, ESI, insurance cover, gratuity payment and pension, apart from a 20 per cent bonus twice a year and holiday wages and financial support for marriage.

Says Mr K K Rajesh, a native of Vadakara and Class A member who

The management taps its neighbour the Indian Institute of Management Kozhikode (IIMK) to update on management practices. “Since it is our need to be better managers, we hold detailed discussions and participate in their short term programmes whenever equired,” says Rameshan Paleri, chairman has been working with the society for the past seven years: “You aren’t just a labourer at ULCC. You are its owner.

This sense of ownership over each of our projects keeps us motivated.” Mr Rajesh’s father and grandfather were members of the society.

According to Mr Rameshan Paleri, chairman, ULCCS, “being labourers ourselves, the management finds it easy to treat the labourers as equals.” This factor further helps the members understand each other’s personal and professional problems.

“The nomination and selection of our members to the management team are done following rules as prescribed in the co-operative society rules of the State,” he said. Mr Paleri has been serving as chairman since 1995 on the back of successive elections. The society has also in place a management team for specialised professional duties such as accounting and human resource management.

The result of forming such an integrated management team from amongst them is there for all to see: better man-management and worker-friendly measures. Not to forget the government-employee

It all started with a `925 platform on the Kozhikode beach for selling fish; 3,500 projects later, it undertook projects `120 crore last year

kind benefits provided to its workers.

Mr Suresh, the director who climbed his way up the ladder through sheer hardwork, pointed out that not one single day of strike has been reported in the company’s 87-year old history.

Most employers in the State have faced shortage of labourers of late. The society, which is also feeling the heat, is trying to overcome it by throwing its membership open to people from outside, including immigrant workers. “Those immigrant workers who have worked with the society for a few years and shown good character at work will be given membership,” said Mr Rajan. Adds Sujoi, a labourer from West Bengal who has been working with ULCC for four years now and is next in line to be granted a Class C membership, “By becoming a member, and receiving the benefits, we too will feel secure while working away from home.

Contractors elsewhere often dupe us of our rightful wage. Further, there may not be adequate work for us on all days. But here, not just are we assured of work round the year, but we are also given paid leave to go home.”

But the most humbling sight would be that of professional engineering and management graduates working alongside the society’s workers, taking orders and learning from them, in equal measure. The strength of the technical staff is 140, of which 31 are engineers. Says Ms Prabisha M, an engineering graduate from Government Engineering College, Kannur: “There has never been any sort of tension at the site 19

The `600-crore UL Cyber Park will be the crowning glory of the society. It will also help Kozhikode’s efforts to place itself as an IT destination Suresh.

ULCCS has over the years acquired state-of-the-art machines and construction equipment such as paver finishers, vibratory rollers, drum and wet mix plants, stone crushers, tippers, excavators, rock breakers, concrete mixer and generators among others.

Those immigrant workers who have worked with the society for a few years and shown good character at work will be given membership, said P K Rajan, supervisor and Class A member when we work alongside workers who actually own the company.

Instead, they always give us the respect we deserve for our professional qualification, and guide us with their experience.” Prabisha, who joined the society in 2006 through a regular interview process, received a Class A membership a couple of years ago. “The immense field experience makes it easier to steer young workers who are new to the job,” said Mr 20

Quality Assurance In the initial years, the client list of the society included the Malabar District Board and the PWD in the districts of Kannur, Malapurram, Thrissur and Palakkad. But today, with an ISO 9001 2008 certification to boot and a stringent focus on delivering time bound quality work, the society’s client list has grown to include the Airports Authority of India, Indian Railways, the National Highways Authority of India, the Kerala Water Authority, the depart-

Most of its labourers who sweat it out in the construction site as workers by day are, at its end, the company’s owners also, holding shares and reaping profits in their own right

ments of Irrigation, Harbour Engineering, Tourism, Public Works, Rural and Urban Development and local self-governing bodies (District, Block, Grama Panchayat).

As a recognition of the quality of its work, the government in 1954 exempted the society from paying earnest money deposit (EMD) for government contracts. The government also treats the society as an accredited agency to undertake its works, as well as those under the MLA Local Area Development Fund, without going through the tender process.

Mr Paleri said the management has always been making deliberate attempts to keep itself abreast of the new trends. After the setting up of Indian Institute of Management Kozhikode (IIMK), the process has become easy. “Since it is our need to be better managers, we hold detailed discussions and participate in their short term programmes whenever required,” he said.

The society’s corporate-like professionalism has found takers among panchayats in Haryana and Andhra Pradesh and organisations such as the National Labour Contract Federation, all of which have sent teams to study the co-operative model of labour contracting. “The Udayapuram panchayat in Kasargod, as well as a few panchayats in districts such as Kannur and Idukki have adopted our model on a small scale to start with.”

Unlike the CEO of a corporate on the fast track, Mr Paleri chooses to look back on the society’s projects and share a thought for their future. “Some projects, especially in the tourism sector, are in a state of natural degradation for lack of maintenance. We feel bad seeing our hardwork being wasted and going unnoticed.”

The passion the boss shows about their work is contagious. No wonder, many workers from the North skipped going home for Durga Puja last month, but wanted to clock more number of working days so that they too can become members of the society ■

Agriculture

Nature’s farm

Zero Budget Natural Farming offers an alternative to farmers to bring down input costs and increase yield

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r Manojkumar M was at the crossroads. The diploma-holder in textile engineering had quit his job and took up farming after the death of his father a decade back, thinking the 13-acre farm would take care of his future. But it was not to be. The yield from farming, mainly sugarcane, was plummeting year after year. “I got 413 bags of cane in 2004; it became around 300 bags by 2007,� says he.

And losses mounted.

The basic premise of ZBNF is that everything that is needed for the plant is present in its root zone.

Hence there is no need to add fertiliser or other inputs from outside He contacted the farmers nearby for a solution. The soil has lost its

fertility due to the use of chemical fertilisers and pesticides, they suspected. The experts from the Kerala Agricultural University confirmed it, and suggested him to add 10 tonnes of organic materials per acre to revive the soil. An impossible task, as the quantity was huge and the cost high.

The news of a training session on Zero Budget Natural Farming (ZBNF) being conducted by Mr Subhash Palekar at Coimbatore reached him in the nick of time.

Sugarcane yield has gone up though input costs have become practically nil, says Manojkumar

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He attended the session and that changed his life. For the better.

If a drop in yield led Mr Manojkumar to ZBNF, Mr Shaji Thundathil’s case could not be more different. In 2007, he and his family were hospitalised for food poisoning after having pesticide-laden food from a restaurant near Adimali, his home town. And that triggered his search for an alternative. Today he organises sessions on ZBNF by Mr Palekar and under the auspices of the Farmers India School of Natural Farming, Adimali, to teach farmers this technique.

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r Palekar, the proponent of ZBNF, had discovered an alternative farming practice decades ago after facing similar problems. An agriculture graduate, he reasoned: if trees can grow in the forests without inputs from outside, plants too can.

After six years of study and analysis, he codified his experiences into a package of practices called ZBNF. The basic premise of ZBNF is that everything that is needed for the plant is present in its root zone.

The plants meet 98 per cent of its requirements from the air, water and the sun; only the rest is taken from the soil. Hence there is no need to add fertiliser or other inputs from outside. He also said the nutrients plants require are not in a ready-touse form and that micro-organisms can make that happen. So, ensure the presence of micro-organisms, and not nutrients. And the big lesson of it all: the chemical fertilisers and pesticides kill these micro-organisms and hence the soil loses its fertility in due course. Another reason to keep pesticides and fertilisers off the farm.

In farms that have been under chemical farming for some time, the yields could be low initially when the switch is made to natural farming, as the chemicals would have rendered the soil bare of micro-organisms.

These micro-organisms are present in large numbers in the intestines of local breeds of cows, say its votaries.

To replenish the micro-organisms in the farm, farmers use ‘Jeevamritham’, 22

The several layers of plants ensures that sunlight and water that fall on the field are used to the maximum a preparation made from the dung and urine of local cow breeds, jaggery, flour of pulses, and soil from the farmland. “One local breed of cow is enough to replenish 30 acres of land,” says Mr Thundathil. “Hybrid breeds imported from abroad do not have these micro-organisms and hence cannot be used.”

The preference for local breeds is not only in cows; ZBNF prefers using such varieties of plants, too. “I use only straight varieties of seeds for planting,” says Mr Manojkumar.

“They are better suited to our conditions and are more resistant to pests.” And the yield has also been

ZBNF gives much importance to mulching.

It helps aerate the soil, prevents runoff of soil and water during rains and controls the growth of weeds. In addition, live mulching is also done by planting intercrops which complement the main crop

increasing steadily year after year, after shifting to ZBNF in 2008.

“The yield increased from 135 bags in 2009, to 159 in 2010 and 269 in 2011. The yield will definitely be higher this year,” says he. “There is a marked increase in the girth of the cane and length between the nodes now,” he adds. Given that his inputs costs are very low, the net earning is all set to be big.

ZBNF gives much importance to mulching. It helps aerate the soil, prevent runoff of soil and water during rains and control the growth of weeds. Nothing except the yield is taken out from the farm as all the wastes are used for mulching. It also ensures that nothing has to be burnt. In addition, live mulching is also done by planting intercrops which complement the main crop.

Five layers of plants – big trees, small trees, shrubs, climbers and creepers – that complement each other are suggested for each farm. Pulses and marigold are grown as intercrops for sugarcane in Manojkumar’s farm.

Plantain, nutmeg, turmeric, and arecanut share their space with the coconut trees.

Apart from the diversification it provides, mixed-cropping has other

Local varieties of cows are an integral part of zero budget natural farming advantages too. Every inch of soil has to be covered so that sunlight or rainwater does not fall on the soil.

This prevents the soil from losing water to evaporation in the summer months and prevents topsoil run-off during the rains. “I plan to do away with irrigation in the next 10-15 years,” says Mr Manojkumar.

And how do they deal with pest attacks? “Plants such as jatropha that attract the insects to them line the borders of the farm,” says Mr Manojkumar. “Small birds also nest there and feed on these insects, keeping pests under check. In case of severe attacks, I use a solution made from bitter-tasting leaves such as neem, guava, etc.”

ZBNF helps save labour, too. Not surprising, since ZBNF avoids the need for tilling, weeding, and even applying fertilisers or pesticides; the only effort that is needed seems to be in harvesting the crop. Mr Manojkumar had been facing difficulty in getting farm labourers ever since the Mahatma Gandhi National Rural Employment Guarantee Scheme took off, but he feels confident of managing the farm without them.

And where does he sell the produce? The bananas are sold to the Palakkad District Horticultural So-

The soil regains its natural qualities after a period of zero based natural farming

ZNBF helps save labour, too, as it avoids the need for tilling, weeding, and even applying fertilisers or pesticides; the only effort that is needed seems to be in harvesting the crop ciety with which he has an agreement to supply at `35 a kilo for the whole year. The organic-certified produce is sold separately at its facility. Mr Manojkumar prepares jaggery out of the sugarcane he produces without the use of chemicals or bleaching agents. He is now on the lookout for buyers for the same. “I don’t want to sell it to buyers who don’t appreciate its value,” says he. He has an organic certification for his produce. “The certification is required for selling the produce at a premium price, but it comes at a huge cost.”

Mr Thundathil is also wary of the organic tag. “Organic farming is today just like chemical farming in many respects,” says he. “Organic fertilisers and pesticides are today much more expensive than chemical ones. And they are introducing many

foreign species, such as the surface feeder worm Eisenia foetida, which do much harm, instead of earth worms. They have also jacked up the prices of local breeds of cows such as the ‘Vechoor’ variety. In effect, they are pushing the farmers into a much bigger crisis.” He has been procuring local breeds of cows from Karnataka and providing them to farmers at a low cost.

ZBNF, on the other hand, frees farmers from the clutches of the multinational companies who treat them as a market for their seeds, fertilisers, pesticides and the like, say its proponents. It also helps them avoid moneylenders who provide them the capital to buy these, and often bankrupt them. At the same time, it protects nature and the consumers from the effects of these dangerous chemicals.

Realising its advantages, many farmers are turning to the method today. “There must be around 5,000 natural farmers in the State today,” says Mr Thundathil. Mr Manojkumar, however, feels that he has just made a beginning. “I have only implemented 25 per cent of the principles of ZBNF,” he says. “There is much more to learn.”

And much more to do ■ 23

When my information changes, I change my opinion.

What do you do, sir?

John Maynard Keynes (1883-1946) The most influential economist of the 20th century.

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Everybody knows that technology changes business.

Today, the change flows through the net.

And the fact is, Kerala is the most networked State in India.

Of the 978 Panchayats in Kerala, 99% have broadband connectivity.

Information changes

Be updated

For subscription: 0484-2421916, +91 9947539023 or subscription@economic-update.in ----------------------------------------------------------------------------------------------After all, our opinions ought to change!

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INFORMATION TECHNOLOGY

For a Kerala Brand

The IT policy 2012 seeks to promote entrepreneurship

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he Information Technology Policy 2012 of the State government lays stress on the use of technology for better delivery of government services to people even as it promises to develop a “Kerala Brand” in services and products.

Seeking to rewrite the delivery modes of government services, the policy calls for reengineering of government processes to make it more efficient and cost effective. “Most government departments are taking the initiative,” said Mr P H Kurian, principal secretary, IT, and the architect of the policy (see interview). The target is to ensure “electronic delivery of services to citizens and businesses across all departments and functions to achieve the objective of transparency and efficiency,” says the policy.

The policy also wants to enable ‘SMART’ (Simple, Measurable, Accountable, Responsive and Transparent) governance through digital work flow and automation systems and promises to re-engineer the government business practices and rules to suit the delivery of electronic services. The policy also envisages providing broadband connectivity to all government offices up to Panchayat level through OFC by 2014. “Subject to technical feasibility, the government shall endeavor to provide all the services coming under the Kerala State Right to Service Act, 2012, electronically,” says the policy.

It also hopes to bring in more transparency by preparing a single unified end-to-end electronic platform for the procurement of goods, works and services through PKI

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enabled workflows in procurement transactions.

The policy reflects the government’s resolve to use IT as a tool to promote enterprises and create jobs.

With an ambitious target of facilitating the formation of more than 3000 technology start-ups by 2020 and the creation of 5 lakh direct employment, the government wants IT/ ITES to be one of the most happening segments of the State’s economy.

For the industry, the policy talks about all the right things. The offer to create the best-in-class ICT and allied infrastructure tops the list.

Citing the availability of trained manpower, low operational costs (40 per cent less than metros) and the rentals/real estate costs which are less than other major IT locations in the country, the policy promises to leverage “the recent trends of IT firms to move towards Tier II and Tier III cities by providing appropriate incentives and concessions.”

The government will ensure that IT parks established in the State will be equipped with green, eco-friendly, energy-efficient layouts and interiors to provide world class, cost effective work space to target small, mid-size and large Indian and multi-national IT/ITeS companies to setup their operations within IT Parks.

The policy seeks to facilitate the formation of 3000 technology start-ups by 2020 and the creation of 5 lakh direct employment

The government, according to the policy, will facilitate development of private IT parks as townships.

“The government will encourage investment in PPP mode for bringing world-class schools and hospitals,” says the policy.

The government-owned IT Park shall lease land parcels to IT/ITES/ BPO companies and private developers at prices determined by the respective boards.

The policy identifies the State’s human resource as a main tool to attract investment to the State. Noting that “11 per cent of the national IT pool comprises of skilled human resources from Kerala,” the policy says the government will establish government-industry-academia task force to identify knowledge partners to develop content for the new curriculum.

It says IIITM-K at Thiruvananthapuram will be developed and strengthened with more departments and infrastructure to create a pool of hi-tech human capital.

It will also strengthen the functioning of the ICT Academy with unified syllabus and standards to enhance the employability skills, communication skills and technological skills with Industry participation.

It also plans to conduct aggressive marketing in the international and national IT markets to make well known the location advantages of Kerala to the prospective investors.

The policy says it will continue to offer various fiscal incentives which are already in place in the State ■

Innovation Cluster The government plans to set up an Innovation Cluster at Infopark, Kochi, focusing on specific technology verticals such as telecom, gaming, VLSI and business analytics. The Innovation Cluster shall have the entire spectrum of private partner networks and will create innovation and entrepreneur zones. This cluster shall have all technology business incubation facilities such as furnished space, mentoring support, network opportunity, lab facility and IEDC centers.

P H Kurian, Principal Secretary, Department of Information Technology

For the young entrepreneurs It’s for the second time that Mr P H Kurian comes at the helm of the IT department. The earlier avatar was as Director, IT Mission, and now as Principal Secretary, Information Technology department. Mr Kurian explains the government’s intentions behind the IT policy in an interview.

Excerpts: The IT policy lays stress on the use of IT for the delivery of government services. It also talks about re-engineering government processes. How practical are they?

IT’s time has come in governance. It helps us to be more efficient and cost effective. At the same time, it’s not an easy task. It involves a mindset change, reprocessing, right technology, service delivery etc. It also needs sensitisation. We are taking steps to make it happen.

All departments have initiated e-governance programmes very seriously. Some, like Labour, have made tremendous progress in reengineering their processes. Data in almost all welfare fund boards under the department have been computerised.

Some are very enthusiastic about it; some are not.

The IT policy talks about developing IT parks. What about the social infrastructure?

We have suggested earmarking 50 per cent of the space in a park for the IT industry, freeing the rest for other purposes. We need to create a suitable ambience for the professionals to work in. There are a lot of Malayali professionals who want to come back to Kerala, and their first demand is for good schools. The government is aware of it. To start with, the we shall promote a school of international standards in Kakkanad.

We can make space available in other parks also.

Isn’t the target of creating 3000 new enterprises ambitious?

We are talking from our experience. One of the best technology business incubators in the country is working from Technopark, Thiruvanantahpuram. The Start Up Village at Kinfra Park, Kalamasserry, is another successful example. The

government has recently announced an incentive for graduate students to take up entrepreneurial ventures.

There is a great upsurge in the entrepreneurial spirits in the Malayali youth. There is better social and family support for entrepreneurs. We shall cash in on them.

What, in your opinion, is the segment in which young entrepreneurs can look at?

There is a strong demand for high-end BPO segments such as business analytics in the State that can make use of the talent available here. We have companies which partner with global giants such as IBM and are doing well. The government will promote such new verticals.

The government in the past was insisting on promoting free software.

The new policy does not seem to be very enthusiastic about it.

The policy talks about adopting open standards, which give us enough freedom, without imperilling our interests ■ 27

Public finance

Direct to home Direct cash transfer of subsidies will be implemented from January 1, 2013 in 51 districts across 15 States ogy has come to its aid. Advances in information technology, biometric identification, payment gateway infrastructure and the like have combined to offer a durable solution.

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he Central government is embarking on a mission that will be the game-changer in governance in the country. Burdened by the massive subsidy which it thinks is a dampener, and a system which allows massive leakage (former prime minister Rajiv Gandhi once said only 15paise of every rupee the government spent on subsidies reached the target), the Central government has announced it will launch the direct cash transfer scheme on January 1, 2013.

In India, subsidy is not child’s play, nor is its efficient delivery. The Union government paid `2,16,297 crore as subsidies in 2011-12. If one used the former prime minister’s estimate, around `1,83,852 crore leaked out last year. And a similar figure must have been lost in all the previous years. As a result, vast sections of the population continue to suffer from poverty. At the same time, argues the government, the

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huge subsidy, at around 2 per cent of the GDP, endangers its financial stability, affecting its ability to take up development works and social security schemes.

Clearly, plugging leakages in the system and better targeting of the subsidies to meet the needs of the deserving are urgent necessities. The government had no solution to the problem then, but today technol-

The government plans to introduce banking correspondents with miniature ATMs to distribute cash. Self-help groups, primary cooperative societies are also expected become distributors

The one and only Aadhaar As soon as it came to power in 2009, the UPA government set up the Unique Identification Authority of India (UIDAI) with Mr Nandan Nilekani as its chairman. The choice of Mr Nilakeni, a founder and then managing director of India’s IT poster boy Infosys Technologies, was clearly intended to tap his technology management skills. The UIDAI was tasked with issuing every resident a unique identification number (UID/Aadhaar) linked to the resident’s demographic and biometric information.

The first Aadhaar card was issued in Maharashtra on September 29, 2010. Since then, over 21 crore citizens have been issued the card. And about sixty crore people are likely to get the card number by 2014.

The Roll out With Aadhaar enrolments gaining momentum, the Union government is moving ahead with its plan to leverage the system. The high-power National Committee on Direct Cash Transfers has decided to roll out the Aadhaar-enabled direct cash transfer system in 51 districts spread across the country from January 1, 2013. At least 80 per cent coverage of Aadhaar is required for the system to be rolled out in a district. In addition, the beneficiaries should also have a

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The Brazilian experience

he Brazilian government has been expanding its welfare state idea through the Bolsa Família, arguably the largest social welfare programme in the world. Started in 2003, with 1.2 million families, the programme today has expanded to cover 13.5 million families and accounts for 0.4 per cent of Brazil’s GDP. The programme has three main areas: income transfer, conditioning factors and supplementary programmes. Families in the programme on an average get $60 per month as income transfer for immediate poverty relief, subject to their meeting conditions such as minimum school attendance of 85 per cent for children from 6 to 15, immunization for children aged 7 or younger, nutrition moni-

toring for children and pregnant women etc. The supplementary programmes are aimed at helping people move out of their situation of vulnerability and include literacy programmes, professional training to improve employability etc. Families may have their benefits blocked, suspended or cancelled when their chances to reverse their situation run out.

The Bolsa Família has helped 20.5 million people get out of poverty between 2003 and 2009 and extreme poverty has fallen from 22 per cent of the population to 7 percent. Inequality too fell to a 30-year low as the income of Brazil’s poor grew seven times as much as for the rich, and three times the national average.

bank account. The UIDAI has met the criteria in 20 of the 51 identified districts, and it is expected to cover the remaining districts before January. The second roll-out to cover more districts would be launched in April 2013.

Initially, 29 of the 42 welfare programmes run by the government including subsidies on LPG, kerosene, pension payments, scholarships as well as payments under MGNREGS and other government welfare programmes would be made directly. Later, subsidies for food, fertiliser and petroleum products will also be shifted to the cash transfer system.

To enable the beneficiaries to withdraw funds from the accounts, the government plans to introduce banking correspondents with miniature ATMs in the districts. Other agencies such as self-help groups, primary cooperative societies etc are also expected to join as distributors in due course.

in rural areas, many of which are still unbanked and without basic necessities such as electricity needed for the system to work. Illiteracy still hovers around 30 per cent, and many of the poor may not get the cards due to problems such as lack of awareness, or even the hostile attitude of the powers that be. And even though biometric technology is being used, problems could crop up during implementation. Some experts point out that fingerprints of manual workers change over time and hence biometric identification for such workers has a twenty per cent margin of error. Worse, the gullible ones among the poor might be fooled by their masters who would corner the benefits in their name.

Many raise suspicion about the scheme, citing that the legal status of the Aadhaar project is still under a cloud and such far reaching changes are being effected even without a discussion in Parliament. They say cash transfer is an indirect way of reducing subsidies, because the cash transferred will not cover the increase in prices due to inflation, unlike the current scenario where the commodities are provided at a fixed subsidised price. They also fear that

Problems Cash transfers have worked well in countries such as Brazil (see box), but the tasks here are very different.

As much as 70 per cent Indians live

Getting an Aadhaar card ■ Go to any authorized Aadhaar enrollment centre with your identity and address proof. In Kerala, the IT Mission is the nodal agency for the project; Akshaya project, Keltron and IT@School are authorized facilitators. In short, you can walk into select Akshaya centres for the purpose.

■ Submit the filled application form at the enrolment centre. Your photo, finger-prints and iris scan will also be taken as a part of the enrollment. You can review the details you have provided and make corrections during enrolment itself.

■ Get an acknowledgment slip with a temporary enrolment number and other details captured during enrolment.

■ The Aadhaar number will be generated and the card mailed to your address within 60-90 days, if the details provided by you are found correct at the central verification.

CASH TRANSFER Phase I ■ 29 of the 42 welfare programmes run by the government ■ Subsidies on LPG, kerosene, ■ Pension payments ■ Scholarships ■ Payments under MGNREGS Phase II ■ Subsidies for food, fertiliser and petroleum products the scheme will lead to the dismantling of the Public Distribution System and in effect it will lead to an increase in malnutrition and hunger.

The government could use the new scheme to help the poor get the benefits of its government schemes; it could also use it to reduce the subsidies and wash its hands off its social responsibilities. Either way, the system is sure to change the lives of the poor in the country – for better or worse ■ 29

BUSINESS CALLED LIFE

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Photo: Sivaram V.

Photo: SIVARAM V

Fishermen unload Eel fish from their fishing boat at a fish harbor in Kochi. Eel fish weighs 3 to 10 kg and fetches `160 to 170 per kg at the auction

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Entrepreneurship

Scheduling it right

A new software uses the structural drawings to generate the bar bending schedule in pictorial form

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he 15-storey Ark Hotel in Changsha, China was built in six days. A builder in the US takes up to 10-15 days to finish constructing a floor while his Indian counterpart needs 25-30. The parts in a passenger car will easily outnumber those in a residential building. But a car takes less than a day in the assembly line whereas a home in Kerala takes almost two years to complete.

Most architects and builders rue that use of technology and modern practices are almost absent in the construction industry here, even though Keralites play a prominent role in its tech savvy counterpart in the Gulf. Inefficiencies at various

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levels prolong the construction period, and increase the cost.

Kochi-based engineer-turnedentrepreneur Mr Reji Zachariah, who has vast experience in the Gulf as well as in Kerala, is making an attempt to effect a change in the situ-

A detailed bar bending schedule helps cut down on the building expenses, for reasons which pan from reduced wastage and time to better quality and labour efficiencies

ation.

The idea he proposes isn’t anything new, nor is it going to drain one’s bank account. It’s simple and more importantly, an accepted norm worldwide. Bar bending schedule (BBS), an age-old system which focuses on identifying the characteristics of the steel bars to be used in construction beforehand, is what he proposes.

S&R Consultants, the structural engineering firm he heads, has developed a software – Aadspro which uses the structural drawings to generate the BBS, ( the quantity, size, length and the bending characteristics of the steel bars) in each and every part of the layout. And that too

The software helps the builder have the bars machine-cut-and-bent even before finishing the formwork, which helps streamline the construction, says Mr Reji Zacharia

in an easily comprehensible picture form.

Ordinarily, builders maintain workers at sites for cutting and bending of bars to be used in its construction, the dimensions of which are arrived upon as the construction progresses. In most cases, this will result in improper cuts and bends, and undue delays which result in wastage of bars since manual error is most common. However, with Aadspro, the dimensions are available beforehand, thereby allaying any confusion or delays. The builder can have the bars machine-cut-and-bent even before finishing the formwork, which helps streamline the construction. Most construction companies already have cutting and bending machines of their own; efficient use of the same can be ensured once such a scheduling becomes practice.

A detailed BBS helps cut down on the building expenses, for reasons which pan from reduced wastage and time to better quality and labour efficiencies. “We are now able to save up to one month on a 10-month long project,” says Mr Jocy George, Director- J J Constructions. “This is because we get more time in the planning phase, which forms the ‘crux’ of construction.” The steel consumption too can be reduced by 5 per cent, since Aadspro helps in the proper grouping of bars based on their characteristics. Machine bending helps in improving the quality of the

material ensuring required capacity. “The photo-like drawings of the BBS from Aadspro, which specifies the number, size and bending degree of the steel bars to be used at each and every part of the building, really helps avoid confusion while executing the plan,” says Mr Mahesh L, deputy general manager (Planning), Skyline Builders, another one of Mr Zachariah’s clients. Mr George could derive direct savings to the tune of 5 per cent of the cost as a cumulative effect of the BBS. Although such software aren’t anything new to structural engineers, an integrated effort in most of the aspects of constructions is surely an edge. The system doesn’t hold out much for small-scale residential builders, but it definitely helps large scale builders who are on the lookout to cut down on cost and time.

Cost analysis Consider a 1 lakh sq ft building with 15 stories, requiring 5kg/sq ft steel usage.

Cost of steel = `50/kg adding tax and bar bending = `60/kg Savings recorded: ■ Normally most constructions use Fe415, instead of Fe500, because bending the latter to required standards is difficult. BBS provides a complete description and hence the process of bending can be mechanized. This enables companies to use Fe500, which has got better load-

bearing capacity and can ensure 10 per cent savings in the quantity of steel, which roughly translates to `25/sq ft.

■ Reduced cutting wastage accounts for a 5 per cent reduction in quantity of steel used.

Savings = 5kg/sq ft x 0.05 = 0.25kg = `12.5/sq ft ■ Quality maintained due to photolike drawings = `2/sq ft ■ Proper estimation of steel possible = `2/per sq ft (bound to an error margin of 2 per cent).

■ Detailing without grouping accounts for 5 per cent reduction in steel.

Savings = 5kg/sq ft x 0.05 = 0.25kg = `12.5/sq ft ■ Since much of the bending work can be started before completion of formwork, builders can save 2 days per floor. For a 15-storied building, the time same would be a month.

For a one-year project, with a building cost of `3,500/sq ft, cost of building = 1 lakh sq ft x `3,500/sq ft = `35 crore Savings calculated at a month’s interest at 10 per cent pa = `35 lakh.

Savings/sq ft = `35 ■ Labour savings in steel bending = `2/kg Savings/sq ft = `10 Total savings = `99 per sq ft.

(Values have been assumed based on a scale much lower than their original price) ■ 33

cover story

Warming up to the sun

34

It looks like an idea whose time has come. Rooftop solar systems that generate electricity from sunlight are mushrooming in the State. Malankara Plantations, Spice Village, Kochi Refineries, MACFAST, CIAL – the list of establishments switching to solar power to meet their needs is growing by the day. And not without reason. It makes sound business sense, writes Aby Abraham GK At the headquarters of Kottayam-based Malankara Plantations, two sign boards show the source of power used there.

Red for KSEB and green for the solar plant. Ever since the company installed a 27KW solar photovoltaic system early this year, the honours went to the green. Always. And the load is not small: it runs all the appliances in the complex including 18 tonnes of air conditioning, computers, lighting, ventilation, office equipment, water pumps and three tea packing machines.

“We haven’t drawn a single unit of power from the grid since the system started working in

January,” says Mr KJ Thomas, managing director of Malankara Plantations. Built at a cost of `65 lakhs, it made the office complex, the first one in the country to be a net zero energy building.

Move over to Spice Village, Thekkady. The responsible tourism player has installed a 65KW system to become the world’s first net-zero energy resort. It replaced the noisy and expensive diesel generators and in the process reduced the energy consumption of the resort from 306KW to 65KW. And it meets all the electricity needs of the resort that is completely off the grid.

35

Oil refiner BPCL-Kochi Refineries has also made its choice. It has installed a 15.6KW solar PV system, that feeds 15KW power to the grid.

It is not just commercial institutions that are joining the solar bandwagon. Mar Athanasious College for Advanced Studies (MACFAST), Thiruvalla, has a 30KW solar PV system up and running for almost a year. It meets a third of the electricity needs of the college. Installed at a cost of `79 lakh, the system is expected to save around `4 lakh a year on electricity charges. It would also receive `63,590 a year from carbon credits.

And the latest in the list is CIAL. It is planning a foray itself, into the solar power sector.

If these successful businesses are

Advantages of solar power ■ Environment friendly – Electricity and Heat production account for a third of the total green house emissions in the world.

■ Freedom from power cuts : the sun is the most reliable source of energy in the world.

■ Eliminates the need for backup devices such as diesel generators and UPS ■ Better quality power, obviating the need for devices such as stabilisers ■ Protection from increase in electricity costs ■ Can be easily scaled up ■ Low cost of operations ■ Can be easily set up at remote places, far away from the grid ■ Lower transmission and distribution costs

Gone are the days when a solar PV system that generates electricity from the sun’s rays was prohibitively expensive.

The price of the modules is being driven down by technological innovations and the increasing demand for them, which makes mass production of the devices possible turning to solar power, then would its viability need more proof ? Gone are the days when a solar photovoltaic (PV) system that generates electricity from the sun’s rays was prohibitively expensive. The price of the modules is being driven down by technological innovations and the increasing demand for them, which makes mass production of the devices possible. The price of a solar panel has come down to a third in the last five years. Today, a solar panel costs around `90/watt in the domestic market, while they are available for

$1/watt in the international market.

At the same time, the cost of electricity produced from thermal power plants are going through the roof, mirroring the increase in price of fossil fuels.

A solar PV system would cost around `2-2.5 lakh/KW today. The Central government provides a subsidy of 30 per cent of the capital cost of the system. In addition, businesses can also claim depreciation on the cost incurred. “I expect to recover my investment in 10 years time,” says Mr Thomas of Malankara Plantations. The picture is even better for enterprises which use a diesel generator set, as a back up. For them, the pay back period for installing a solar PV system will be just 4-5 years.

The economics would get even better once KSEB starts purchasing power from the rooftop solar plants.

The system is expected to have a life of 25 years and maintenance is expected to be minimal. “We have to dust the panels once in a while,” says Mr Thomas. “In addition, the battery will have to be replaced after 10 years.” Mr George Mathew, vice-president of TeamSustain, a Kochi-based green technology solution provider, is also confident of its

Disadvantages ■ High cost of the solar PV system ■ Batteries have to be replaced after a period of time (10 years)

36

Mr Georgekutty Kariyanappally, managing director of Lifeway Solar, at the 10KW rooftop solar PV system installed at Baklava Pastries & Sweets, Thodupuzha

longevity. “We use state-of-the-art products from across the world in the system. Even the smallest parts of the system are built with a 25-year life in mind.” Team Sustain on an average installs a couple of PV systems a month, which include businesses and residential premises.

Solar PV systems may work just fine when the sun shines bright, but what happens during the rainy season when the skies are cloudy? “Even then, we get around 60-70 per cent of the production,” says Mr Mathew.

“Excess capacity is build into the system to avoid shortages during the lean months.” This poses a problem of plenty during the sunny months, when excess electricity will be produced, which could be fed to the grid as is today happening in many developed nations.

The Union government has asked all the State electricity boards to start reverse metering that will allow the purchase of the excess electricity generated. Once the scheme comes into effect, customers could do away with the storage unit – the expensive batteries – that is required to store the electricity generated.

They could supply the excess power generated directly to the grid during the daytime when electricity is generated and draw power from the grid to meet the demand during the night. For offices, schools and colleges that function only during the daytime, storing electricity shouldn’t be a problem though. They could do with a battery of minimal size to meet their needs.

I

t is not just big businesses that are going solar. Environment conscious home-owners are also adopting it to power their homes, even though it is a costly proposition for the household sector, which gets power from the grid at a lower cost.

Dr RVG Menon, a familiar face in the engineering and intellectual circles in the State and former chairman of ANERT, is one among them.

He installed a 1 KW system at home for `2,25,000. He connected all the household appliances such as a TV,

Potential in India

Guajarat Solar Park, the world’s largest solar power park, produces 605 MW power

I

ndia receives abundant sunshine through out the year, thanks to its location in the equatorial sun-belt. Most parts of the country experience sunny weather for 250-300 days a year. The annual global radiation which falls on the country ranges from 1,600 to 2,200 kWh/m2 and this could be used to produce 6,000 million GWh of energy per year.

Rajasthan, northern Gujarat and parts of Ladakh, Andhra Pradesh, Maharashtra, Madhya Pradesh receive maximum sun shine in the country.

The government is taking serious steps to promote solar energy use in the country. The Jawaharlal Nehru National Solar Mission established for the purpose, has targeted 20GW of electricity to be generated from solar PV projects by 2022. The first phase of the mission is currently underway, and has a target of installing 1,300 MW solar power by 2013. The second phase which will start in 2013, will give a big push to popularize solar PV systems in the country, by establishing an enabling framework. The huge volumes targeted and the indigenous production of components that are currently imported is expected to drive down the costs again. The Solar Mission anticipates cost of solar power to be on par with that of thermal power in 2022. It has also proposed that solar heaters be made mandatory in buildings for ensuring that all heating applications - domestic and industrial - below 80°C are solarised.

In the last two years, since the National Solar Mission has been in operation, installed solar capacity in India surged from 17.8 MW to over 700 MW. Gujarat tops the list of States, having already commissioned solar power plants totaling 600MW capacity. India today has 98.05 MW of rooftop solar capacity. Jharkand tops in rooftop solar with 16MW capacity, while Rajasthan follows with 12MW and Andhra Pradesh with 10.5 MW. The price of electricity from solar energy has also come down to `7.49/kWh nearly the price of electricity from fossil fuels, and lesser than that of diesel power. It is now expected that solar power will reach grid parity before the target date of 2022.

To develop the sector, the central government has recently set up the National Solar Energy Corporation, a not-for-profit company under “Section 25”. The company will oversee the implementation of the various solar power projects in the country.

37

A Kerala model in solar

T

he State government has introduced a scheme to install 10,000 roof-top Solar PV power plants, of 1 kW capacity in the State. It will provide a financial assistance of `39,000 per system, in addition to the Central subsidy of 30 per cent, subject to a maximum of `81,000. ANERT will be implementing the scheme. Persons desirous of availing the benefit have to submit the application form in the

Configuration 1

2

3

officials will then inspect the site.

The minimum requirements for the plant are 15 square metre shade free area for installing 1 kW solar panel array and a covered, ventilated area near the module with restricted access for placing the battery and inverter. The plant will be allotted to the applicant if found technically feasible. The applicant can select a system from 3 configurations, as per his requirements.

Capacity of SPV Module

Capacity of PCU

Capacity of Battery

Remarks

1000 W

1000 W

1 kVA

1 kVA

5400 Wh

Recommended if used mainly during day time

1000 W

1 kVA

12000Wh

Mostly night time use with one day autonomy (about 5 hours on full load per day)

The applicant can select the vendor from the list of approved system suppliers/integrators provided in the allotment letter. A copy of the work order along with invoice and bill of material has to be presented to ANERT for release of subsidy. After commissioning the system, ANERT will conduct an inspection and release the sub-

38

prescribe format along with an application fee of `500 as DD drawn in favour of Director, ANERT, Thiruvananthapuram. A self-attested copy of a photo identity card, copy of recent electricity bill, and a self-addressed and `5 stamped envelope should also be sent along with the application. A registration number will be allotted by ANERT in the acknowledgement letter to the applicant. ANERT

7200 Wh

Mostly night time use of about 5 hours on full load

sidy to the beneficiary.

The system will have a warranty for 5 years. The PV modules also should have a performance warranty for their output peak watt capacity (not less than 90% at the end of 12 years and 80% at the end of 25 years). The beneficiary should maintain and operate the system for a minimum period of 5 years,

failing which the subsidy would have to be refunded. He will also have to furnish performance details of the system to ANERT and allow ANERT officials to inspect the plants.

The scheme which was launched on 1 September, 2012, has received 3,764 applications till November 15, 2012.

refrigerator and washing machine to the solar system and they are all working smoothly. The air-conditioner and the geyser are still connected to the KSEB grid.

“There is a subsidy of `81,000 from the Union Ministry of New and Renewable Energy,” Mr Menon said. Mr Thomas Dominic, a director of CGH Earth group in Kochi, went solar with his holiday home Hibiscus in Alappuzha, much before others even thought of it. He first installed a 1.8 KW system, and on seeing that it worked perfectly, upgraded to 6 KW system. “The house is now completely off the grid,” says Mr Dominic.

“Why do you go for expensive cars instead of using public transport? In the same way, people should be ready to spend money to secure their power, which is a much more important issue,” says Mr Georgekutty Kariyanappally, managing director of Lifeway Solar, a firm that specialises in developing solar solutions. Today a solar PV system that takes care of all the electricity needs of a typical 2,000 sq ft, three-bed room house would cost around `22.5 lakh. The exact cost depends on the energy demand of the house, as the systems that are designed and developed are site specific.

Mr Kariyanappally feels that there should be around 500-600 installations of solar PV systems with capacity greater than 1KW in the State today. “5-6 new systems are being installed every month,” says he.

Not surprising when one considers the power cuts and tariff hikes that loom on the horizon. But Kerala definitely has some catching up to do when compared to States such as Jharkhand which already generates 16MW of power from rooftop solar plants.

Realising the potential, the State government is coming up with a proposal to generate 10 MW of electricity from rooftop solar systems this year. It is planning to set up 1KW rooftop solar power systems in 10,000 homes this year and extend the scheme to another 1,00,000

Components of a solar PV system ■ Solar Panels which convert sunlight into direct current – accounts for almost 50 per cent of the total system cost ■ Charge Controller which regulates the voltage and current coming from the PV panels before going to battery.

It prevents battery overcharging and prolongs the battery life ■ Battery Bank – stores the energy for use later ■ Inverter – converts the DC power into AC power for use or for being fed back into the grid.

homes next year. In addition to the 30 per cent subsidy provided by the Centre, the State government will also subsidise it by `39,000.

The State government also plans to make rooftop solar power systems mandatory for all new residences with more than 3,000 sq ft area.

Streamlining the grid to enable connectivity to the rooftop solar PV systems to the grid will also go a long way in reducing the cost of the system, and encouraging its adoption.

The plans, if implemented, would add 100MW capacity to the State at a cost of just around `390 crore to the State exchequer. The figure compares favourably with the capital costs of hydel power at `6-7crore/ MW capacity. That too without environmental impacts such as submergence of forests, or pollution.

Cost and time overruns during construction that plague many projects in the State can also be avoided.

The proposal is apt for the State that would find it difficult to set up large scale solar power plants due to paucity of free land. States such as Gujarat have large swathes of wasteland that do not have any vegetation, unlike Kerala. At the same time, Ker-

ala has any number of pucca rooftops needed to support the panels. Solar energy could also complement the hydro-electric projects in the State, providing it with another renewable source of energy.

The State should also look at the ingenious solutions that are being proposed to overcome the problem of paucity of land. One of them is to use floating solar panels in the reservoirs that will also reduce loss of water due to evaporation. The example of Gujarat, which is covering the 19,000 km long Narmada Canal network with solar panels, is a case in point. The water flowing underneath cools down the solar panels and helps generate around 15 per cent more power.

The proposal to subsidise rooftop solar power plants has already generated huge interest in the State. Says Mr Kariyanappally, who advertised in newspapers seeking rooftops on rent for establishing solar PV systems, “In a couple of years, the whole eco-system will change. A host of new businesses based on solar power will come up in the State.”

The sun is indeed rising on this sunrise sector ■ 39

Art

Swiss artists Ms Maya Hottarek and Mr Louis Werder are busy with their creation at the Pepper House in Fort Kochi for the biennale

Art for leisure

Kochi-Muziris Biennale is expected to give a major fillip to Kerala tourism with half a million people expected to visit the sub-continent’s biggest art event

A

Kuruvilla Chacko

spinwall House in Fort Kochi represents the town’s pre-eminence in spice trade.

Of yore. But as Ms Maya Hottarek, a graffiti artist from Switzerland, walks down the Aspinwall lane, her face brightens seeing a graffiti on 40

the wall which depicts the heart and brain interconnected by a network of red and pink capillaries. It is one of the many art works to be showcased in Kochi Muziris Biennale (KMB), the biggest art spectacle to grace the Indian subcontinent ever. And Ms Hottarek, its proud creator, is staying back with her partner Mr Louis

Werder to be part of the excitement which begins on 12/12/12; an event in which Kochi and its neighbouring town Kodangallur will welcome art into their soil, reminiscing its cultural past.

The couple are just two among the many art lovers from across the globe who have begun to flock into

the city to gaze, discuss and paint before a global audience, for an event that runs across a period of three months and ends on 13/03/13. Their tribe asks no fee in return but, “just the freedom to paint our hearts out and a canvas to showcase our work”, as Louis puts it.

The Business of Art Some call it the Olympics of Art; some just a big pot of gold. Both have their reasons, true and full. For a biennale today is as much about art as it is about commerce. It has already done to the many cities it has graced, from Venice to Tokyo to Gwangju what the Olympics or the FIFA World Cup have done to their hosts, albeit on a slightly different scale: it has brought with it class.

And amidst the efforts to exhibit the highest quality of art, the KMB is already being touted as the next major money spinner for Kerala Tourism. Or rather, a valuable addition to Ayurveda, the backwaters, hills and beaches of the State. It just could even be the decade of art and culture, boosting tourism revenues like never before.

Biennale, the Italian word, means ‘every other year’. In the evolved sense though, it’s just an art exhibition sans the usual commercialisation attached to the regular art fairs.

Its sole purpose is to bring art, considered a rich man’s fancy, closer to the heart of the common man where it also belongs. ‘Art initiation, discussion, sensitisation and promotion’ is its motto, and for a State which has a rich legacy of trade, commerce and exchange of cultural ideas with the western and oriental world for many centuries, the biennale will be an apt recap of its ancient periods. As also a befitting tribute to the unveiling of the ancient port town of Muziris — the mainstay of the pepper trail in Asia — to global visitors looking for a slice of ancient Kerala and its traditions. It also seeks to promote places, people and cultures which portray the way of life of a Malayalee. So much so that every form of art gracing this year’s biennale, be it

sculptures, paintings, installations or new media, will follow a site-specific theme ‘Art through the culture of Kerala’, picked up by the Biennale Foundation, co-founded by contemporary artists of Kerala origin Mr Bose Krishnamachari and Mr Riyas Komu, who was a participant in the 2007 Venice Biennale.

The theme, though region specific, was handed over to the 88 participating artists (of which nearly 44 are international coming from as far as Brazil, UK, Portugal, Netherlands and Australia among others) more than a year ago to help them converge their little understanding of the locale into vivid strokes of creativity. Added to this is the excitement of showcasing their works in heritage buildings and warehouses of Fort Kochi and Mattanchery such as Aspinwall House, Moidu’s Heritage, Pepper House, Durbar Hall, Cochin Club and David Hall, as well as historic sites in Kodangallur and Paravur such as Kottapuram; all together covering an area of 2,60,000 sq ft.

International artist Amanullah Mojadidi from Afghanistan, who visited the State a number of times over the past one year to grasp its complexity, sums up the mood of his clan, “The idea behind the KMB is to engage in a political discourse at a communal level. The works on dis-

play will encourage a critical assessment of the interaction between the local and the global. I am developing a concept which blends history and imagination to exhibit in installation form, an archaeological excavation of a pseudo fictitious ancestor’s home in Kochi.” While the organisers and artists look forward to a new dawn in its artistic and cultural milieu, the biggest benefactor will probably be the State’s tourism sector. Traditional biennale venues across the world have not just benefited from art gatherings, but have also minted money in equal measure from the number of culture enthusiasts pitching tent; a segment of tourists, who according to Mr Jose Dominic, managing director, CGH Earth Group, are the highest spending class of tourists anywhere in the world. And that is where Kerala, which at present holds 22 per cent share of the tourist arrivals in the country, can look forward to with glee.

Art as Business Art and culture as harbingers of tourism is not a new phenomenon. “At the recently concluded World Travel Mart in London, visitors came up to me and when I mentioned Kochi, their first reaction was, ‘isn’t that where the biennale is to be held’,” recalled Mr Dominic. “Once the bi-

The biennale is expected to raise the profile of the host town.

A graffiti on Aspinwall House in Fort Kochi 41

Fact File Event Dates: From 12/12/12 to 13/03/13 Venues: Durbar Hall (main venue), Pepper House, Aspinwall House, Moidu’s House, David Hall, warehouses in Mattanchery, Kottapuram and other public places in Kodangallur Expected no. of artists: 88 contemporary artists from 40 countries, of which 44 are Indian, including 22 local artists. Some of the big names gracing the event are Ernesto Neto (Brazil), Mathangi Arulpragasam a.k.a MIA (UK), Rigo (Portugal), Joseph Semah (Portugal), Jyothi Basu (India), Reji PK (India), Subhodh Gupta (India), Jonas Stall (Netherlands).

There will also be over 100 artists for performing arts, theatre arts, workshops etc.

Expected tourist arrivals: approximately half a million people over a period of 3 months Other important biennales: Venice (estd 1895), Gwankju (estd 1995), berlin (estd 1998), Istanbul (1987), Havana (estd 1984), Sydney (estd 1973), Manifesta-multiple European cities (estd 1996)

ennale gets going, it will be easy to promote the location to a more niche market abroad.”

The success of the five-day Jaipur Literature Festival attracted 100,000 people in 2011 and helped brand the Pink City as more than just a heritage destination, he said, and pointed out that it can be replicated in Kochi as well. International media houses such as Conde Nast Traveller and New York Times have already cited Kochi as among Top 10 must see destinations for 2012-13, only because of the biennale. With such publicity, the State could attract more heritage and cultural tourists, the kind who spend at least 35 per cent more than their non-cultural counterparts, according to a study conducted by the ‘Cultural & Heritage Traveller’.

Stories of biennales and art events raking in the moolah for the host cities range from Venice (where it all started in 1895) to Liverpool (total revenues earned were a whopping 27 million pounds) to even a small town called Bilbao in Spain.

Says Mr Krishnamachari, foundermember of the Biennale Foundation, “The economic change that has flown into the town of Bilbao after it conducted an art event six years ago is worth noticing. The event literally transformed the city and more tour-

Riyaz Komu and Bose Krishnamachari, trustees of the Biennale Foundation 42

ists are aware of its existence now.

Today the city is using its tag as an art destination to promote other locales within it.”

This holds promise of an analogous model of opportunity for Kerala Tourism as well to promote its flagship project, the Muziris Heritage Project, which is yet to take off or attract much attention from heritage travellers, despite the hype and finances poured into it. Then there is the immense potential of marketing the untapped Malabar region as well. “Tourists, especially from Europe, travel for a reason,” explains Mr Dominic. “They need a story, an experience to pull them to a place.

By promoting art and culture, we are selling a story to them, of an experiential destination called Kerala.

Once that happens, tourists heading to nearby countries such as Sri Lanka, Thailand etc will shift course to India, which though relatively more expensive, will have a dynamic content to offer.” He cited the example of the Volvo Ocean Race which Kochi hosted in 2010, which helped sell Kochi and Kerala as a tourist destination. Attention is also being given to attract the local populace and domestic tourists to the biennale. For the same, performing arts shows, theatre, seminars, symposiums and workshops for students and the public will be conducted, free of cost.

Tour operators in the city too are having a field day, as confirmed

by Ms Maneesha Panicker of Silk Route Escapes, a luxury travel company based in New York and Kochi, “We have started an exclusive nineday art tour focussing on Kochi and the biennale. As part of the tour, we will be taking visitors on curated art walks, discussions with artists and visits to other parts of the State beyond just the regular places, to experience the heady mix of culture and arts prevalent across the State.” Most high end hotels in Fort Kochi, Mattanchery and mainland Kochi have reported nearly full booking, thanks to the biennale which incidentally falls during the State’s peak tourism season. As Mr Dominic puts it,

When the Last Post of Ethics Crumbles…

Johny M L

B

iennales showcase international art for a larger public; most of the biennales are known by the names of the cities where they take place. As biennales are large-scale cultural events with huge economic investment behind them, the names of the cities that host them come to play an extraaesthetic role in the formation of the very ideology behind them.

Tracing the history of such events, one would come to know that economic reasons always played a major role in their creation. And when we understand and recognise this, despite the cultural posturing, we tend to identify them as ideological platforms that help to proliferate certain aesthetical hegemonies protected by economic interests. Hence, there should be no qualms in accepting the fact that the forthcoming Kochi Muziris Biennale (KMB) is also an ideological hegemonic tool with well-defined economic interests.

The question whether such formations of biennales are wrong or not is pertinent in related discussions. KMB, led by two contemporary Indian artists, in fact should have been a welcoming change for the general art business climate of India, which has been going through a phase of recession for the last three years. However, from “The Kochi-Muziris Biennale is the most significant event to be held this decade. It will change the way tourists, both domestic and international, perceive the city. We will bear the stamp of being a city conscious of its art and culture.”

Adds Mr Riyaz Komu, “Once a climate is created to identify Ko-

its very inception, the KMB Trust got into rough weathers due to the lack of transparency in using up the public fund. The event has come to be viewed as an instance of largescale corruption on the one hand, and on the other, as a political manipulation of public funds. Today, with a departmental enquiry on the usage of funds proposing the blacklisting of the organisation, the possible focus on art has been shifted to ethical practices that are to be invested when it comes to artistic involvement.

This writer has been at the forefront of the agitation against KMB knowing well that the funds were not used in the right direction.

The point of debate was centered around ethical practices in art in the beginning, though, at a later stage it got into personal allegations and calling names. The point raised rightly at the outset was the lack of transparency in the very formation of the KMB Trust and the hasty transferring of a hefty amount to its account. Despite the outcry from the artists and activists in Kerala and elsewhere, the KMB decided to muscle through the controversy, mustering up support from some fringe elements as well as economic powers. The most disheartening thing about the KMB Trust was that its trustees refused to engage themselves in a public debate, which in fact could have enriched the Kerala society and would have prepared it to receive the impending biennale in a better chi as an art destination, it will put the entire State on the international tourist map, more than any other event. This is a not-for-profit event, since no artist is allowed to sell his work. It’s only a platform for him to be regarded for his work, and for the city to acknowledge its past.”

Back in Fort Kochi, Ms Hot-

way.

As mentioned above, as KMB is a city-oriented event, many powers have come around to support it, irrespective of their political colors.

While one holds the position that economic results of this biennale would definitely be something to reckon with, all the other aspects including the initial projection of the programmes and art-related events stand diluted thanks to the mismanagement of funding. It would be absolutely naïve if we take the position that the critique is possible only when the project is done and remain silent towards the corrupt practices taking place in the name of art and an art event. Anyone who understands the dynamics of art and business would ask whether the KMB Trust had any working capital to begin with. The answer is negative. There are all the reasons to believe that the KMB Trust was looking for complete funding from the government/s. The artists who are at the helm of affairs seem to have ‘invested’ their experience and intelligence to organise this event and they have all the right to do so. However, there are certain ethical practices that one should follow when one handles public funds.

And if art and artists could not raise themselves to the position of protectors of that ethics, who else would do that for us and to which direction would our society head?

(The writer is a Delhi-based art historian and critic) tarek and Mr Werder are busy on the canvas of their next artistic expression: a whitewashed wall of Pepper House, a former spice godown. But the pair gives an excited wink to let it be known that the creation will be fully revealed only on 12/12/12. “Be here,” they said.

An invitation for all ■ 43

Human resource

Hunt with the hare Want to attract good guys? Better shed your ego and understand the candidate

Krishna Kumar

“W

hat should I do to get the best people?” the CEO of a mediumsized IT company in Technopark, Thiruvananthapuram, asked me the other day. I could feel his frustration. His team had been running well-oiled recruitment campaigns (they are costly, too), using online portals, social media, newspaper advertisements and attractive employee referral schemes. The target, however, remained elusive. He called for mission-critical hiring meetings every day. “Why is it that the candidates do not accept our offers despite giving good hike from their current salaries?” The team had no answer.

I have. Some, at least.

Before I venture to attempt them, I would make the scene clear: if a company with smart hiring managers and a formidable campaign is finding it a Himalayan task to get good candidates onboard, then one can imagine the case of a start-up company!

Now, to the real issue: “Talent is 44

not patient, nor faithful,” quoted a well-read senior HR manager. The new generation workforce is unpredictable, ambitious, greedy and do not really care about their employers, he said, sounding tired with the attrition he faces in his software services firm with less than 200 people.

“They find new opportunities faster than before,” he rued. “I’ve been with the company for more than seven years. Now some of the new guys ask me, with a tinge of contempt, “7 years, it is really long time”. They update their resumes in Monster and Naukri, almost every week, online portals which have more than 10 million resumes, the goldmine of recruiters. “They are defensive when it comes to policies, perks and other benefits. I’m not able to communicate with them. I feel generation gap with them,” he confessed.

People are the key, no doubt. But the key people forget the fact, very often. At a huge cost. Your organisation needs good people, not just to run the daily routine, but to take it to the next orbit. Even if you are a small business owner, fast growing entrepreneur or the leader of a medium or large organisation, your worry is essentially the same: to attract the best people who can deliver. But when it comes to hiring talent, we are shy and formal, largely.

What is talent? It is, essentially, those individuals among that group ‘who have the potential to add most value’, says McKinsey Consultants.

Why is it so difficult to attract them?

Because they have wider choices, more opportunities and they look for something very different – such as a great leader to work with, a company who respects their individuality or even a friendly workplace.

During the process of hiring, they become very alert and catch signals from their potential employer on how they approach them. They want to touch and feel the organisation before they sign the offer letter.

One CEO of a large IT company was reported as saying that not only did he not have enough talent to execute the company’s strategy and operations, but he did not even have “the talent needed in HR to hire the missing managers.”

When companies are looking for talent readymade, potential talent demands higher attention and increasingly attractive perks, apart from a market competitive compensation package. They understand that the company needs them to do mission-critical tasks, and all they ask for is to share the benefits.

Talent attracts capital Companies used to be relaxed about hiring talent, but no more. Now, they need to be proactive instead. Earlier, capital used to attract talent, now it is talent which attracts capital.

Many investors are looking for smart people to lead their new business ventures, on a semi-entrepreneurial mode, but talented professionals find

the job markets more lucrative and fast growing.

What talent looks for?

Do you want to attract the best guys? I have no tips to offer, but some ideas, smart companies used successfully. Talent has become the most sought after commodity. Smart companies understand that and proactively do things to get best guys in the industry.

During my close interactions with companies, I found that some smart ones use creative ways to attract talent. They shed their ego and ‘propose’ to high potential candidates. And they fall in love with each other. It is not easy, but they manage it.

After talking to specialist headhunters, hiring managers and leaders, I feel, what makes the talent get seduced to the company are small things. Choice-rich candidates take

Smart companies use creative ways to attract talent. They shed their ego and ‘propose’ to high potential candidates. And they fall in love with each other!

things in a way different from what employers think of themselves.

One such example is Infoparkbased VisualIQ, a market intelligence company, which has a knowledge workforce sourced from different cities in India, including IITs and IIMs. “In today’s knowledge-based businesses, these young people are far more aware of their working environment, of ‘what's going on around here’ than us,” says Sanita Chittilappilly, who heads HR at VisualIQ. Starting from the call of the recruiter, at every point of interaction with the company, candidates are looking for a friendly and professional person on the other side. It is the ‘feel’ that the smart companies create during the process of hiring that does the trick.

According to a Linkedin survey, one third of fully-employed professionals in India are actively looking for work; five out of every six passive candidates considered themselves approachable. Employers need to be ultra-vigilant about their knowledge assets that are casually looking out for better opportunities. “Sometimes, it all depends on one person,” reminds an angel investor who funds an IT start up.

Business leaders are often heard saying, “nobody is indispensable.”

But now, replacing talent will be riskier and costlier. Instead, the motto must be ‘attract-nurture-developengage-retain’. An employer needs to be creative, intelligent and calculative at each point of an employee’s lifecycle. “Our HR is now called Organisational Effectiveness,” says HR leader of a midsized IT company in Kerala. “Words we use shape our attitude to things,” he said.

What candidates say ■ Accepting an offer depends on how much care the recruiter gives especially about giving information about the company and the job role.

■ They think they are big. I have lot of options.

■ I’m offering my hot skills to the company. They should treat me prop-

Business leaders are often heard saying, “nobody is indispensable.” But now, replacing talent will be riskier and costlier. Instead, the motto must be ‘attractnurture-developengage-retain’ erly during the discussions. I don’t like to call it an interview.

■ I didn’t like the way the recruiter considered my experience in my previous companies. Just because I couldn’t articulate it properly during the interview doesn’t mean that I haven’t done it.

■ The HR manager was not really appreciative. He seemed to be generally skeptical about my candidature. I don’t want to accept the offer.

■ They delayed my offer letter for more than 20 days. I lost interest.

■ The Company’s website is not very impressive, and they have no online presence. It’s not exciting.

■ After the interview, no one called me from the company. They sent offer letter to my email after five days.

I’m not feeling good about it.

■ On the day of joining, my employer was clueless of what they are supposed to do with me. On the fifth day, I decided to quit. I had no offer in hand, but I don’t want to work where I feel nobody.

■ What I liked with my employer during their process of hiring me was the warmth they extended at all rounds of my interviews and the clarity of feedback they gave me at every point.

Demand for ready-made hot skills is higher than the supply.

Closely engage your potential candidates to attract them. Hiring managers should never allow them to get distracted with other equally attractive opportunities.

The hunt begins. Now. The writer is CEO of GreenPepper Consulting India Private Limited (www.greenpepper.in) ■ 45

Tech Column

Future's solutions In a fast evolving tech universe, free softwares will have their place, co-existing with the proprietary ones

S R Nair Managing Director, Team Frontline Limited

T

oday our world has become truly technology enabled.

Technology has gone deeper into the operations of organizations.

In the form of Hardware, Software, Networking, Internet and the like, technology assists business to expand, grow and diversify. Information technology works ubiquitously across; be it a corporate, government, institution or household. It wouldn’t be an exaggeration to state that through computers and plug and play gadgets that includes smart phones, software today drives human life.

46

What is Software?

Software forms the essential part of Information Technology. It is a collection of computer programs and related data that provides the instructions which tell a computer what to do and how to do it. In other words, software is a set of programs, procedures, algorithms and its documentation concerned with the operation of a data processing system.

Predominantly software automates an activity that otherwise could have been done manually, based on a workflow.

Until the late 1960s, IT companies such as IBM, Control Data Corporation etc. supplied huge and expensive mainframe computers on a lease to customers. Service and all software related to it, including the source code were supplied by manufacturers, along with the hardware, without separate charge. The availability of source code - the form in which a program is originally written by a human using a programming

language before being converted to machine code directly readable by a computer's central processing unit enabled customers to modify or improve an application program.

Software becoming a separate industry By the end of 1970s, IBM led an industry change by starting to charge separately for software and services and also, ceased to supply source code to the users. Software vendors started treating source code as a trade secret and started covering their software solutions by copyright which, provided the legal basis for its owners to make it proprietary and establish exclusive rights on the same. They started putting major restrictions on its use and started delineating the specific terms of use of their software in an end-user license agreement (EULA). For software provided by large companies, EULAs are generally long and complex contracts. Among the most common

of the prohibitions for such programs are making unauthorized copies, using it on more than a certain number of computers and reverse engineering it.

As time went by, software by itself started becoming a big industry.

Large scale enterprises, as they started to automate many of their business activities, started earmarking specific budgets annually for buying, implementing and maintaining software solutions. Today huge Software only companies such as Microsoft, Oracle, SAP, Computer Associates etc. do multibillion dollar business on software alone.

In the later part of IT growth, cost of software, because of the use of high-end brain power, started hitting the roof. Computer applications such as ERP, CRM, Core banking, Inventory management, Supply chain etc., though started delivering tremendous value for enterprises to grow; came at a cost. While huge profit making enterprises could afford to roll out these applications, smaller companies, wanting these solutions for growth and sustenance could not afford these branded software solutions.

Genesis of open software solutions The intelligentsia involved in software development detested the armtwisting tactics of senior software firms on its customers and started to get grouped to make solutions available at the open free space – the Internet. Thus movement of open source software came into existence.

Open Source Software is a software that is available with source code that are provided under an open-source license that permits users to study, change, modify, improve and at times; also to distribute the software. Open source software is very often developed in a public, collaborative manner, with many likeminded software personnel participating in the development of very complex enterprise applications.

The free or open software movement started with development of Linux by Linus Torvalds, a Finnish

Open Source Software is a software that is available with source code that are provided under an open-source license that permits users to study, change, modify, improve and at times; also to distribute the software American software engineer and hacker, who for the first time, made available to the public an open and free operating system (a Unix OS derivative). His personal mascot - a penguin nicknamed Tux - has been widely adopted by the Linux community as the mascot of the Linux kernel. Today Linux and its various forms drive many computers and servers across the world and almost all proprietary application software vendors are forced to port their applications to run on Linux operating

System.

Today complex software applications such as ERP, CRM, & Supply chain, Messaging, Data repository, Security & Storage solutions are available at the open source, mostly free of cost or for a pittance. Many organizations and companies that could not afford applications developed by SAP, Oracle, Microsoft and similar companies, down load these applications, customize the same (even to the extent of changing the code) and implement it for running their business. Practically all applications are available in the open source in multiple brands and versions and it is up to the user to select the one which best suits him.

Who drives open software?

The Open Source Initiative (OSI) is an organization dedicated to promoting open source software.

The organization was founded in February 1998, by Bruce Perens and Eric S Raymond. Around the same time, Richard Stallman also started his Free Software Founda-

Advantages of open source software: ■ Lower cost: Since development is done by a community of volunteers, your costs don’t need to cover a company’s development expenses.

■ Customization: Open source solutions are designed for developers to adapt and expand, which is not the case with a proprietary system.

■ Nimble: Open source projects adopt new trends faster than proprietary systems.

■ Openness: Open Source software is usually designed with integration in mind; whereas proprietary systems have business motivations to lock organizations into a closed system.

■ Fast bug and security fixes: Many people combine together to fix the source code, and rapidly fix problems as they are discovered.

Perceived disadvantages The arguments against open source are that they are of questionable quality: This is an invalid argument. The crowd-sourcing approach yields more secure code than any company can accomplish in-house. Another complaint is that in open software, no one takes responsibility: The argument against Open Source is that it’s not a company, and there’s rarely any direct customer service. It is true to some extent. However, they have a ton of documentation and online forums. Proprietary software companies often point out that open source software is not aligned with corporate needs: Open Source software, while they may be technically robust, might not be designed with the needs of corporate users in mind.

47

tion (FSF);a movement which aims to promote the universal freedom to create, distribute and modify computer software and chose the term ‘open source’, to dump the moralizing and confrontational attitude that had been associated with 'free software' in the past. Stallman focused on "freedom" that underlies free software as against wholly proprietary software that was sold and implemented by established software companies without source code.

The most important advantage of free software, and the one that’s especially important from a public policy perspective, is that releasing a given piece of software as free software produces more societal wealth than releasing that same piece of software under a proprietary license.

Proprietary software is only used by those willing to pay the purchase price. Free software is available for everyone to use. Releasing a product as free software will always allow it to be used by more people, thereby increasing the total wealth of society.

Free or open source software should not be confused with Freeware, which is a type of proprietary software that is offered for use free of monetary charges. However, as is the case with other types of proprietary software, there are generally severe restrictions on its use and the source code is kept secret. Examples of freeware include Adobe's Acrobat Reader and Microsoft's Internet Explorer web browser.

It may also be noted that free software licenses and open-source licenses use the same legal basis as proprietary software. Free software companies and projects are also joining into patent pools like the Patent Commons and the Open Invention Network. The owners of proprietary software on the other hand, exercise certain exclusive rights over the software.

New trends in software industry Though in the beginning software was generally free, as computers became more common, the production of proprietary software became an 48

MSME & Open Software

M

icro, Small & Medium (MSME) industries cannot shell out huge amounts in procuring the application software. In these days of roller coaster swing of economy, no company is sure about long term sustenance and they try to save cost as much as possible. Industry, particularly smaller ones, is also worried about paying huge annuities to proprietary software companies for using their license. MSMEs would want to move away from capital investment to operational expenses which suits them better. They simply cannot afford to get trapped within the proprietary technology or to appoint expert technologists to develop, run and maintain the application software.

This is where open source solutions come very handy. By implementing the open source solutions, companies can minimize investment as well as avoid big time annuity payments, and at the same time leverage on current technologies to expand and grow the business. Technology is changing and becoming obsolete fast, so huge one time investment in technology is not advisable. excellent business model for many companies. However, in recent years some companies have begun to realize that free software can also be highly profitable. The most outstanding example of this is IBM, which continues to reap high returns from its investment in Linux.

Some industry observers think that the role of proprietary software will decrease in the future because of the growing competition from free software. This view holds that free software will eventually come to dominate operating systems and major application programs. Proprietary software will remain strong in some niche markets, mainly for business and technical applications for which

The most important advantage of free software, and the one that’s especially important from a public policy perspective, is that releasing a given piece of software as free software produces more societal wealth than releasing that same piece of software under a proprietary license

the demand is relatively small or specialized and for which users will be willing to pay relatively high prices.

That's not to say that every new idea in software is germinating in the open-source world, but proprietary software on long term, is certainly being shunted aside, mostly due to the cost.

The open-source inventions of today are aimed at solving specific problems businesses are encountering, particularly those born on the web. And now, proprietary vendors are ever more eager to hitch their wagons to open-source projects. Oracle rolls out premium products and services that leverage the technology.

Amazon's Elastic Compute Cloud and other public cloud services are largely built with open-source components like MySQL, JBoss, Tomcat, Xen and Linux. Though the service is sold at a cost it is to be noted that all of the underlying pieces are from open source.

So we see a merging in open source technologies and proprietary software. Today's open source vs. proprietary software debates typically center not on which model is better and there is some general agreement that both have their place and many times, they join to work out an application and embrace and integrate within each other ■

49

Personal Finance

Gently down the stream…

The Rajiv Gandhi Equity Savings Scheme helps you save a little more tax if you haven’t yet entered the world of equities

W

ant to save more on tax, but have exhausted your limits in various tax savings schemes? The Rajiv Gandhi Equity Savings Scheme (RGESS) helps you do just that, if you haven’t taken to investing in equities yet. And if your income hasn’t grown too big.

Equities have been a tax efficient avenue for investments for quite some time now. The returns from

50

them – dividends and long term capital gains – are tax-free at the hands of the investor, while short term

The scheme will be available to new investors in the equity market, with an annual income below `10 lakh

capital gains are taxed at 15 per cent if they have been traded through the stock market.

Even then, the share markets in the country have been floundering for some time now, with both foreign and domestic investors keeping off it. To encourage the flow of funds to the market, by attracting new retail investors, the Union government has introduced the Rajiv Gandhi Equity

Savings Scheme (RGESS) with tax benefits attached to it. The scheme was introduced in the Finance Bill this year, by inserting a new Section - 80CCG - for RGESS. It will be effective from the assessment year 2013-14.

The scheme The scheme will be available to new investors in the equity market, with an annual income below `10 lakh.

Such investors will be identified using their PAN numbers.

The investors who already have opened a demat account, but have not made any transactions in equity or in derivatives till the date of notification of this scheme, can also avail of the scheme. It is also open to account-holders other than the first account holder who wish to open a fresh account.

Benefits The scheme offers a deduction in tax for up to `50,000 invested in specified securities. The investments can be made in instalments during the financial year. As much as 50 per cent of the amount invested will be eligible for deduction from tax. The deduction is in addition to the exemptions available under Section 80C but will be a one-time affair. If the investor has claimed any amount in a financial year under the section 80 CCG, the amount invested in the following years in the account will not be eligible for deduction.

Investments Investments in equity are fraught with risks. More so when novices take a direct exposure to stocks. In order to protect the investors, all of whom are investing in equities for the first time, the government has put some controls on the stocks that can be bought under the scheme.

Stocks listed under the BSE 100 or CNX 100, and those of public sector undertakings which are Navratnas, Maharatnas and Miniratnas would be eligible for investment under the scheme. Investments made in follow-on public offers (FPOs) of

Tax saved by investing `50,000 in RGESS Tax Slab

`2,00,0005,00,000

`5,00,000 – 10,00,000

`10,00,000 +

`50,000

`50,000

Amount eligible for deduction

`25,000

`25,000

Not eligible

Tax Saved

10%

`2,500

20%

30%

Investment Tax rate

`50,000

Advantages ■ Opportunity to save more taxes ■ Helps get more returns by investing in equity these companies would also be eligible under the scheme. The investments made in IPOs of PSUs, with annual turnover of `4,000 crore or more in the past three years, would also be eligible.

To attract investors who are not ready to invest directly in equity shares, the government has also brought exchange traded funds (ETFs) and mutual funds (MFs) that have RGESS eligible securities as their underlying under the scheme. But the funds have to be listed and traded in the stock exchanges and settled through the depository mechanism.

Mechanics The investments made under the scheme would have a total lock-in period of three years. But investors can churn their portfolio after

The scheme offers a deduction in tax for up to `50,000 invested in specified securities. 50 per cent of the amount invested will be eligible for deduction from tax. The deduction will be one-time affair

`5,000

0

Disadvantages ■ Complexity ■ One time deduction ■ Higher Risk investment ■ Comparatively lower deductions the first year, if they so desire, subject to conditions. They can trade in the securities after one year but have to maintain their investment at a level that is equal to the lesser of the amount claimed as income tax benefit or the value of the portfolio before selling the shares, for at least 270 days in a year, for the remaining two years. The idea is that investors can book profits that they have made in their account, but should maintain their level of investment in RGESS compliant securities. The shares would be valued on the closing price on the day prior to the date of trading. The tax benefit will be withdrawn if the conditions are not met.

India with a population of around 120 crore has just 2 crore demat accounts. The Finance Ministry estimates that there are around 1.5 crore PAN holders with an income between `2-10 lakh who do not have a demat account. Even if a fraction of them invest in the scheme it could provide an impetus to the markets.

The government is also working on a plan to make demat accounts attractive for new investors under the scheme. It is planning a no-frill demat account with low charges for retail investors who make very few transactions. Currently companies charge `300 – 1000 a year as annual maintenance charges for demat accounts ■ 51

Securing your food The better way to ensure food security is to build the purchasing power to buy food from the market, rather than growing our own food

K

erala’s food security has been a major talking point among the people in the State. Some worry about our dependence on food from neighbouring States.

Others are concerned with the unabashed use of pesticides in the neighbouring States. The pesticide spray is especially for produce meant for Kerala, while they themselves consume separately grown organic vegetables – the newspapers inform us. The government too is doing its bit. It has been encouraging people to grow their own vegetables on terraces in the cities.

This doctrine of self-reliance is good to hear, but it is neither practical nor sound economics. Vegetables are not the only food item that we consume. Would the government ask us to grow rice and wheat also on our terraces in future? Or for that matter, fruit trees, or milk, or meat?

In fact, our neighbouring State has been doing us a great favour by cultivating the vegetables that we need. And at a great cost to themselves. The effects of pesticides are more on farmers than on consumers. Studies show that just 0.1 per cent of pesticides reach the target. The remaining pesticides are spread in the atmosphere, polluting the soil, water and air.

We have seen the damage that pesticide use can cause to the region as a whole in

52

Kasaragod. The effects of endosulphan are not seen on the consumers of cashew nuts, but on the population in the locality. Similar stories are being reported from other parts of the State, too. It is not incidental that the Malwa region of Punjab, India’s poster boy of the green revolution, has the highest incidence of cancer in India.

Farmers in Kerala aren’t an angelic lot when it comes to pesticide use. They are no different from their counterparts in our neighbouring States. The endosulphan disaster happened in our State. A visit to the pineapple fields, the cardamom plantations or rice and vegetable fields in the State is enough to convince one of the same. Money has the same colour everywhere. And so does greed.

It is our move away from farming in general and from food crops in particular that saved us from more such disasters. Crops such as rubber require lesser amounts of pesticides than food crops such as rice and vegetables, which are more prone to diseases and short term in nature.

From an economic point of view also, the shift has been rewarding for us. Tamil Nadu and other States have a comparative cost advantage in farming food grains and vegetables.

In fact, our neighbouring State has been doing us a great favour by cultivating the vegetables that we need. And at a great cost to themselves

Tamil Nadu and other States have a comparative cost advantage in farming food grains and vegetables. This helps us get these goods at a cheaper rate than if we were to produce it ourselves This helps us get these goods at a cheaper rate than if we were to produce it ourselves.

In addition, it frees up our people to take up more remunerative vocations in other sectors around the world. As a result, the share of agriculture in our State’s GDP has shrunk to just 8.33 per cent today.

Another argument for growing our own food is our fear of losing our food security.

Even if we grow our own food, the vagaries of nature such as droughts could leave us vulnerable to food shortages. Kerala has been trading with the rest of the world for centuries now. It has a long coastline and lies near the international shipping lines. It is time we realised that having the purchasing power to buy food from the market contributes more

to our food security than growing our own food. A third of the world’s food grain production today goes to feed animals, grown for their meat. Hunger exists in many parts of the world not because of unavailability of food in the world but because it is unaffordable to many, or because adequate trade links don’t exist.

To those who are concerned about the effects of pesticide residues on our health: washing the vegetables properly before cooking would remove a good percentage of pesticide residues in it. Besides, organic shops are present in most of our cities today. Yes, such products are a tad costlier, but people have to be willing to pay more if they want to get quality products. Kerala is a society that spends `6,000 crore a year on alcohol.

So money is not the issue here. We should be willing to pay more for quality products. A premium price is sure to attract more farmers to the organic way.

The farmers in our neighbouring States take a huge burden on them to feed us. We should be thankful to them for our daily supply of vegetables. Till we reach our utopian dream, where every household grows its own vegetables organically, let us pray that Tamil Nadu continues to farm ■ 53

HEALTH

Fruitfully dry

Dry fruits and plant nuts are best substitutes for spicy snacks A P Jayadevan

W

hen it comes to snacks, most people go for readyto-eat, processed food or spicy products. True, they entertain our taste buds well. But do they satisfy our nutrition requirements also?

Are they the best option?

Choose intelligently “One of the key contributors to one’s health is the amount and quality of food eaten.” says Ms Shahana M, dietician at Sunrise Hospital, Kochi.

“Knowingly or unknowingly, most people combine wholesome and unwholesome food in their diet. One can stay healthy just by keeping un-

54

wholesome food out.”

Dieticians blame snacks as the main source of unwholesome food that enters our stomach. True, you have many mouth- watering choices today for a snack: fried, spicy, frozen and sweet. They have nothing great to offer except a variety of wonderful tastes and relatively high amount of calories and unhealthy fat.

Dieticians vouch for nuts and dry fruits as the best substitutes for common spicy snacks as they offer more quality in less quantity. They include cashew nuts, dates, almonds, raisins, pistachio, apricot, fig and walnut.

How to eat them Eating dry fruits is not a messy thing, reasons Ms Shahina. “Carry some to your office. You can enjoy them even while travelling.”

Nuts and dry fruits are highcalorie foods. Due to great taste, one may be tempted to overeat them, which should be controlled. “A handful a day is enough for a healthy person,” said Ms Shahana.

Most dry fruits can be eaten raw,

but mixing more than two makes for better digestion. And say ‘no’ to fried and salted nuts, she added.

“When you are at office, have a few cashew nuts or peanuts or dates at your teatime instead of fried foods.

You can ensure limited consumption by eating them when you are not so hungry,” she explained.

Raisins can be used after soaking in water overnight. Dates can be taken directly or with water or milk.

Cashew nuts can be taken with milk or directly. Around one ounce (6-10 numbers) of cashew nuts is enough for a day for a healthy one. Pistachios and almonds also can be used directly or with milk. Peanuts are available in butter form which can be used with bread etc.

Dry fruits and nuts can be used as salad toppings. They can be added in a variety of dishes like oat meal, cereals, curries and cakes. Diabetics should consult a dietician before eating them.

An ounce of cashew nut has 5 grams of protein in it. It is cholesterol-free, and has heart-friendly fatty acids. Cashews help diabetics reduce their triglyceride levels with its monounsaturated fats. Hospitals prescribe dry fruits and nuts to patients, Ms Shahana said. “The amount and timings are chosen carefully according to the patient’s condition. Even diabetics can have them in their menu, excluding some items like dates and raisins.”

They should be stored in a tightly sealed container in a cool, dry place.

It is better to buy them in moderate quantities. Limit the usage by considering your body conditions.

Jew Street, Kochi. “People are still not aware of the qualities and usage of the dry fruits and nuts available in our market,” he rued. “And most of what we sell goes not to house kitchens but to bakers.”

More information on the goodness of dry fruits will goad more people to try them, he said. “Once a popular Malayalam magazine carried a feature on the qualities of almonds, and its sale got a big boost,” he said. “Some doctors here have started prescribing dates for better sperm count and people started buying them more.”

Mr Thajuddeen says people are misinformed about the dry fruits as well. Many believe that dry fruits and nuts reach the market after extracting oil or essence, forcing them to keep away. High prices is another factor which prevents people from becoming regular buyers, he said.

Still less aware?

Many varieties of nuts and dry fruits are available in Kerala, but only few people buy them, said Mr M P Thajudheen, who runs NKP Sons, one of the main dry fruit merchants in

How to know the quality?

It is a common belief that only high priced items are of best quality. But Mr Thajuddeen said prices depended on demand and availability.

That which makes one nut or

Places from where they come It may be interesting to know from where all these nuts and dry fruits are reaching Kerala’s markets.

Nut

Place of origin

Dates

Iran, Iraq, Saudi Arabia and Oman

Cashew nut

African countries and Brazil

Almond

California and Iran

Pistachio Fig

Raisins

Walnut

California and Iran Afghanistan

Afghanistan and India Kashmir

Why nuts and dry fruits: ■ More quality from less quantity: a handful a day is enough ■ Heart friendly: they contain mostly high density lipoproteins (HDL – known as good cholesterol) ■ Presence of fats that lower cholesterol: Poly unsaturated and mono unsaturated fats/ omega 3 fatty acids ■ Good source of carbohydrates, dietary fibre, vitamin A, vitamin C, B-complex vitamins ■ Excellent source of micro nutrients such as potassium, iron, calcium and magnesium ■ Contains no fat, cholesterol or sodium. fruit better than the other can be taste, size, shape or colour, which solely depend upon the place of origin. For example, raisins coming from Afghanistan are considered to be of superior quality ■ 55

Kerala statistics

Economy of Kerala GSDP at constant prices(2010-11)

`193383.39 crores

Growth Rate

9.13%

Per capita income at constant prices (2010-11)

`56107

Per capita income at constant prices (2010-11) (Quick estimates in rupees per annum)

District wise distribution of GDP Sl District No:

44572 53569 39051 53298 36740 50519 85070 54645

54645

98

572

64648 60370 53595 60945

Yearly Growth Rate (%)

1

Thiruvananthapuram

21373.44

9.79

2

Kollam

14786.75

8.66

3

Pathanamthitta

7733.38

10.08

4

Alappuzha

12702.89

9.15

5

Kottayam

13440.40

9.26

6

Idukki

6464.48

7.66

7

Eranakulam

28711.07

9.38

8

Thrissur

18914.88

9.63

9

Palakkad

14347.31

8.99

10

Malappuram 15188.22

8.51

11

Kozhikode

16644.82

8.82

12

Wayanad

3448.18

8.48

Kannur

13708.38

8.89

Kasaragod

5919.19

8.78

13 14

56

GSDP at constant prices (2010-11) Quick estimates in crores of rupees

Sectoral Distribution of Gross State Domestic Product

Sector

Contribution to GSDP in crores of rupees

% share

1

Agriculture & Allied Activities

16110.58

8.33

2

Forestry & Logging

2491.26

1.29

3

Fishing

1884.27

0.97

4

Mining and Quarrying

909.07

0.47

Total Primary

21395.18

11.06

1

Manufacturing

16014.96

8.28

2

Construction

20892.05

10.80

3

Electricity

1733.78

0.9

4

Gas

47.25

0.02

5

Water supply

248.64

0.13

Total Secondary

38936.68

20.13

Railways

907.22

0.47

2

Transport by other means

14858.63

7.68

3

Storage

87.45

0.05

4

Trade, Hotel & Restaurants

36644.36

18.95

5

Banking & Insurance

7.22

6

Real estate ownership, Business ,legal

13957.10 23578.96

12.19

Public Administration

8426.87

4.36

Other Services

20027.86

10.36

Total Tertiary

133051.53

68.8

1

7 8

Sector

Growth Rate (%)

Primary

0.64

Secondary

6.12

Tertiary

11.57

Sectoral Distribution of GSDP 2011 Primary 11%

Secondary 20%

Tertiary 69%

1960 Tertiary 29%

Primary 56%

Secondary 15%

57

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