Enterprise &Economic Update Kerala

Vol 2, Issue 1&2 February-March 2012

RNI No. KERENG02297

Editor K J Jacob Principal Correspondents Aby Abraham G K A P Jayadevan Design and Layout 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.

Caught in the Web

I

t has been more than a decade since the IT revolution hit Indian shores. Our businesses embraced the changes it brought in whole-heartedly. It used the efficiencies it generated to successfully weather the competition from multinationals in the wake of liberalisation.

The educated and enterprising Indian went a step further and established whole new industries using the Internet as the backbone. Outsourcing became the trend of the decade. The land of snake charmers came to be known for its software engineers also, and the country soon became the back office of the world.

But for the average Indian, life remained much the same. To them IT and the Internet were something that concerned the people sitting in glass houses only. At least, until recently.

The spread of the Internet has changed all that. It has started touching the lives of more people in our country. People are accessing the Internet even on their mobiles today. It is metamorphosing into a medium of trade from that of communication. More people are today buying their stuff on the net. The web is slowly becoming a one stop shop for everything under the sun.

Any change will produce its set of winners and losers. This change too won’t be much different. The retailers up in arms against foreign retail might be the worst affected.

But for you and me it is definitely a positive change. It is sure to make our society more efficient and put more power into the hands of the consumers. For the customer is the king in the cyberspace, too.

Contents COVER STORY

26 Weaving the Net For many generations, the word Amazon meant the world’s largest river flowing through those wild South American jungles.

For the GenNext, it’s the world’s largest online retailer. In Kerala too.

The Malayali consumer has also got on to the Net bandwagon 4

Contents

20 Showcasing Kerala State to showcase 10 core sectors before investors during Emerging Kerala meet

15 The wait ends Kerala’s decades-long wait for a rail coach factory, is getting over 34 The strategic marketing tool

16 Export Fresh Farmers gain as the Centre for Perishable Cargo at CIAL helps them export fruits and vegetables in garden fresh condition

CRM applications help companies acquire and keep customers 36 Finding your tax Calculate your tax first, before jumping to make investments to save it

The Other Side 38

We develop, they die

Developing nations are also responsible for green house gas emissions and climate change

5

Infopark Cherthala Infopark Cherthala is the second spoke of Infopark Kochi to start operations. The park is located 45 minutes off Kochi on 66 acres of land at Pallipuram village. 60 acres in the park has been notified as a sector-specific SEZ. The park has a built up area of 2 lakh square feet.

In addition, six plots of measuring 4.5-5 acres each have been earmarked for IT companies and co-developers.

6

The park building is fully air-conditioned and has been provided with 100 per cent power backup. It also has facilities such as an incubation centre, conference hall, bank, ATM, cafeteria and dining hall. A plug and play facility for small and medium players is also present.

Infopark hopes to develop the park as a BPO hub.

Three companies have already started offices in the park.

The number is expected to increase soon as the rentals are 30 per cent lower than those charged at Infopark Kochi.

7

Rail projects Seeing the articles in your magazine, I am very glad that we are looking at our transportation infrastructure at least now. One must remember that political considerations alone are not sufficient as technical and planning aspects are also given importance in all these matters.

I have my reservations about some of the projects; and suggestions for some others.

Monorail: Monorail systems are not suitable for our State where high density traffic is expected due to very rapid urbanisation. Monorails are adopted for very short lengths to connect airports, city centres etc from metros, roads and rail etc. This system has a complicated bogie design in straddle type which consumes very high energy at 150 kilocalories per passenger kilometer, though the initial cost of structures is marginally less.

Duo rail LRTS consumes only 50 kilocalories per passenger kilometer. We need a system to carry at least 20,000 people per hour in each direction but the monorail carries only half the number. The failure rates of monorails are very high; so also is the maintenance cost of tyres.

Kochi Metro: If we make even moderate changes in the alignment, it would benefit the city a lot. The changes I would suggest

8

are: From Edapalli to Palarivattom, take the line through NH bypass up to Kakkanad junction.

Take the metro from Kacheripadi to High court, Marine Drive and join at south station with the present alignment.

Thirdly, from Vytilla, take it along NH bypass up to Kakkanad junction and to Civil Station and to Tripunithura on airport seaport road.

MEMU services: A new station at High Court in the old Ernakulam terminal will be ideal for the suburban services.

Coastal shipping: A detailed study for a coastal shipping route is necessary within 10 nautical miles to touch all ports. This will avoid the conflict with fishing as this marked channel should be out of bounds for fishing nets and parking of vessels.

Hope these recommendations will receive due attention.

C Raju, B.E, IRSE (Rtd) Former General Manager, Urban Transport, RITES, New Delhi & Chief Engineer, Konkan Railway Corporation

Taking to the water Kerala should build more Roll On, Roll off (Ro-Ro) facilities like the one available at Willington island to make use of its waterways. The Konkan railway already has a RoRo facility, which transports trucks loaded with cargo. The trucks can be loaded on along with its cargo and transported to its destination on the rails. This arrangement helps the truckers avoid the crowded highways, saving cost and time. The feasibility of a similar arrangement on our waterways should be studied.

This would solve the problem of last mile connectivity for the waterways and also obviate the need for material handling at the ports.

The plans to develop coastal shipping in the State is laudable. But one should be mindful of the problems. New reports say that the ICTT at Vallarpadam is in bad shape due to problems such as siltation and our failure to get it exempted from cabotage. The State should iron out the problems in the sector, if it is to succeed in it ambition to transfer 20 per cent of its cargo from road to waterways.

M A K Nair, Kochi

I say!

The world is changing.

I hope Kerala will also change. If we have big projects, talent will come. We have to provide a platform.

Sometimes it works, sometimes it may not Mr Sam Pitroda, Advisor to Prime Minister, on the 10 projects that he suggested for Kerala’s growth

We want to convert Kerala from a wage-earning society to an entrepreneurial society. Nurturing micro, small & medium enterprises would be the path for such conversion Oommen Chandy, Chief Minister, while speaking at the Pravasi Bharatiya Divas Ayurveda, which was not well-known in 1970s and 1980s, has become popular and now hotels have ayurvedic spas.

Similarly, Kerala cuisine is an evolving cuisine not only in Kerala, but also in different parts of the world. The factor that ours is a consumerist society is going to help the growth of industry in Kerala K M Chandrasekhar, Kerala State Planning Board vice-chairman, speaking at the Kerala Management Association's annual convention

Kerala probably has the most globalised economy in the country. Kerala has done well in the recent years. In fact, in the last five to six years, the Kerala economy has done extremely well Montek Singh Ahluwalia, Planning Commission's deputy chairman at an interaction with students at St. Teresa's College Ernakulam Sir, I don't share the gloom and pessimism on India. I plan to invest `70,000 crore in India over the next two years. To me, India remains the best investment destination Mukesh Ambani, Reliance Industries chairman, at the meeting of the Prime Minister's Council on Trade and Industry

9

The New is built on METCON Metcon TMT bars revolutionized the construction sector in Kerala with its technology, strength, durability and value-for-money. When many brands Ductile inner layer (Ferrite pearlite)

claimed themselves to be TMT, Metcon’s German CMCS technology made the silent yet assertive

Tough outer layer (martensite)

statement in consistency.

Metcon. Trusted TMT steel of Kerala

10

Customer Care: 94470 65360 | email: metcon@gmail.com

AT A GLANCE

Putin presses ahead with Eurasian Union The European Union might be in a crisis, but that has only emboldened the Russian Presidentelect Vladimir Putin to go ahead with his idea of the Eurasian Union (EAU) made up of Russia and other post-Soviet states. Russia, Belarus and Kazakhstan had last November signed an agreement to set up the EAU, modelled on the European Union, by 2015. The economies of the three countries were already integrated to an extent with the establishment of the customs union in 2007. Now they have formed the Eurasian Economic Commission (EEC) headquartered in Moscow and charged with forming a single economic space, leading to the establishment of a Eurasian Union. The EEC has started work on January 1,

2012 creating a market of 170 million people with a $2.55-trillion economy.

Scott Thompson is Yahoo CEO Yahoo, the internet giant, has named Scott Thompson, the president of PayPal, as its chief execu-

tive officer. He replaces Carol Bartz, who was dismissed last September, as the company struggled to compete with newer players such as Google and Facebook. Yahoo has a large web audience with 700 million online visitors a month, one of the largest audiences on the Web. It is a leader in online news, sports and finance, and has been making huge profits, but its share of the online advertising market is dwindling, falling from 13.3 to 11 per cent in 2010.

5 more minutes to midnight Alarmed by manmade threats to humanity such as the Fukushima disaster, the continuing interest in nuclear power, and climate change, scientists have set the Doomsday clock one minute closer to midnight. The symbolic clock was set up in 1947 at the University of Chicago, to warn people about the imminent threat of the destruction of humanity, with midnight represent-

ing complete destruction.

The clock was set at 7 minutes to midnight then.

The height of the cold war saw it move to just 2 minutes to midnight in 1953 after the hydrogen bomb was tested. But the 90’s saw the clock move back to 17 minutes to midnight, as the cold war ended and nuclear arsenals were cut. It has been a steady move towards disaster since then, with the clock standing just 5 minutes to midnight now.

Apple world’s top PC vendor

in consumer preference towards pads. Sales of pads grew at 16 per cent year-on-year, to claim 22 per cent share of the total client PC market, while the sales of other products declined 4 per cent. Apple shipped over 15 million iPads and five million Macs in Q4, 2011 – increasing its share to 17 per cent, of the 120 million client PCs shipped globally. Of the other players in the top 5, only Lenovo could increase its market share, while Acer, Dell and HP saw their pie shrinking.

Steve Jobs might be dead, but the going is only getting better at Apple.

The company reported its best ever quarterly profit and revenue figures in the December, 2011 quarter.

Revenue jumped 73.52 per cent to $46.33 billion from $26.7 billion in the year ago quarter while net profit more than doubled to $13.06 billion from $6 billion. In the quarter, Apple also became the top PC vendor in the world overtaking HP. Its growth was powered by the shift

S&P downgrades eurozone bailout fund Standard & Poor’s has downgraded the creditworthiness of the eurozone’s rescue fund - European Financial Stability Facility - by one notch to AA+. The move followed ratings cuts for France and Austria, which provided financial guarantees to the fund.

The cut reduces the fund’s ability to raise money at cheap rates, and makes the Eurozone’s efforts to get out of the crisis more difficult. The fund still has the AAA rating from Moody’s and Fitch the other two big rating agencies, but analysts warn that more downgrades are in the offing.

The fund would have to offer more interest on borrowings or get more guarantees from its AAA rated backers if that were to happen.

11

AT A GLANCE

Direct tax collection up 14.5% in Apr-Dec The direct tax receipts grew 14.5 per cent to touch `3.96 lakh crore in the April-December 2011 period. But the growth has slowed down from the 20 per cent recorded a few months ago, raising concerns about rising fiscal deficits. Gross corporate taxes receipts during the period increased 12.5 per cent to `2.70 lakh crore from `2.40 lakh crore, while personal income tax receipts increased 19 per cent to `1.26 lakh crore from `1.06 lakh crore.

Wealth tax registered a 54 per cent growth to `646 crore while the securities transaction tax fell 26.48 per cent from `5,118 crore to `3,763 crore. The net direct tax receipts registered a growth of 8 per cent to touch `3.24 lakh crore, up from `2.99 lakh crore in the same period last fiscal.

PSUs to invest `1.76 lakh crore

In a bid to spend more and stimulate the economy, the government has asked 17 cash rich state-owned enterprises to step up their investments. The companies have already readied investment plans to the tune of `1.76 lakh crore - `1.41 lakh crore domestic and `35,000 crore for overseas acquisitions - for 12

the next financial year.

ONGC will be the biggest investor, putting in `53,526 crore. NTPC will chip in with `20,995 crore while Power Grid Corporation India Limited will invest `20,000 crore. Oil India Limited, Coal India Limited, BHEL, GAIL, Indian Oil Corporation, Engineers India Limited and SAIL are some of the other companies on the list. The government has also asked the PSUs to diversify into related areas if sufficient investment options were not available in sectors that they operate in.

Hydrogen-powered 3-wheeler at expo ‘HyAlfa’, the world’s first hydrogen-powered threewheeler, was displayed at the Auto Expo 2012 held in New Delhi. 15 HyAlfa three-wheelers were run on an experimental basis

by India Trade Promotion Organisation, the organiser of the expo at its venue, Pragati Maidan. The United Nations Industrial Development Organisation, International Centre for Hydrogen Energy Technologies, Mahindra & Mahindra and IIT-Delhi together developed the vehicle with support from the Ministry of New and Renewable Energy. The vehicle has the potential for reducing pollution, as it uses a carbon-free fuel, hydrogen. But the high cost of hydrogen – `250/kg – could limit its use, and it is still some time away from commercial production.

Vodafone wins tax case

The Supreme Court of India has ruled in favour of Vodafone in its `11,000 crore tax dispute with the Indian Government. The transaction in question was Vodafone’s `55,000 crore acquisition of Hutchison Essar. Vodafone International Holdings, BV had bought 67 per cent stake in Hutchison Essar from CGP Investments Ltd, a Cayman Islands based company. Indian income tax officials argued that the sale was subject to capital gains tax as the assets acquired were based in India.

But the Supreme Court accepted the company’s contention that India cannot levy taxes on a transaction made between non-Indian companies outside the country.

Many multinationals companies – GE, SAB Miller, Cadbury, AT&T and Vedanta to name a few – are involved in similar cases in India. The ruling is expected to set a precedent in those cases and boost the confidence of foreign investors in the country.

Moody’s upgrades Indian deposits Global rating agency Moody's has upgraded India’s short-term foreign currency rating for foreign currency bank deposits from NP (not prime) to P-3 (prime), suggesting

acceptable ability to repay short-term obligations.

The agency had earlier upgraded the credit rating of Indian government's bonds denominated in domestic currency from NP to P-3.

The move will encourage FIIs to increase their exposure in gilt securities and help companies raise funds from abroad at cheaper rates. The agency said that the diverse sources of Indian growth have enhanced its resilience to global shocks, adding that the present slowdown could reverse sometime in 2012-13.

Re most undervalued currency: Big Mac Index The Indian Rupee might have been battered in the last few months touching a lifetime low of 53.71/72 against a dollar, but all is not lost. The Economist’s Big Mac Index which measures the effective purchasing power of currencies by looking at the cost of McDonald’s popular burger in various countries, says that the rupee is the world’s most undervalued currency. The Big Mac sells for $4.20 in the US, while the comparable Maharaja Mac, costs `84 in India.

This translates to $1.62, a 61 per cent reduction in price, based on the exchange rate of `51.90 a dollar. So considering the purchasing power parity, the index says that the rupee trades 61 per cent below its actual price against the dollar. The Chinese yuan is also not far behind trading at 41 per cent below its value.

AT A GLANCE

Pitroda’s 10 areas for Kerala Mr Sam Pitroda, adviser to Prime Minister on public information infrastructure and innovations, has suggested 10 core areas for the State to focus on to fast track its development.

They are: *Coastal waterways *Knowledge city *High speed rail corridor *Waste management *Ayurveda *Strengthening vocational education through IT *Insurance scheme through mobile bills *Utilising the services of people above 55 *Modernisation of traditional industries *e-Governance for transparency Mr Pitroda said that his team would prepare a white paper on the viable projects and submit it to the government. The projects will have to be implemented using the PPP route, he said.

Tourist visa on arrival at CIAL The Central government has decided to allow visa-on-arrival facility for citizens arriving from Japan, Singapore, Finland, Luxemburg, New Zealand, Cambodia, Laos, Vietnam,

Philippines, Myanmar and Indonesia at the Cochin International Airport.

The move is expected to boost the tourism sector in the sector. Besides Kochi, the Ministry of Home Affairs (MHA) is extending the facility to Goa, Hyderabad, and Bengaluru airports also.

The government aims to double the number of foreign tourists arriving in India during the 12th plan.

Capgemini in Technopark After Oracle, it is the turn of another global major to set up camp in Kerala.

Capgemini, one of the largest consulting, outsourcing and professional services companies in the world, is coming to Technopark. The Paris-based company has taken up space at the Leela Infotech in Technopark. It plans to open its office soon with a staff strength of 200. Capgemini has offices in 40 countries across the world

and it employs 1,15,000 professionals. With the launch of its office in Trivandrum, Capgemini will be present in eight cities in the country – Mumbai, Bangalore, Chennai, Kolkota, Hyderabad, Gurgaon and Pune being the other cities.

One more CFS at Vallarpadam Gateway Distriparks, one of the largest players in the container logistics industry in the country, is all set to open its CFS at Vallarpadam. Gateway Distriparks (Kerala) Ltd and its joint venture with the Chakiat Group had earlier won the bid to set up the CFS on 6.5 acres of land opposite the ICTT at Vallarpadam.

The land has been taken on lease from the Kochi Port for 30 years.

The pre-stage facility will be readied in the first phase of the project. The warehousing facilities will be built in the second phase and it is expected to be ready by August. The CFS will have 25,000 sq ft of warehousing facilities and would be able to store around 1,000 TEUs when complete. It will also have a separate area for Customs authorities to inspect cargo on wheels.

The ICTT offers huge opportunities for players to set up CFSs. JNPT has 22 CFSs, Chennai Port 24 and Tuticorin Port 12 while the ICTT at Vallarppadam has just a couple of CFS’s in its vicinity.

TISS chooses T-TBI as partner The Technopark Technology Business Incubator (T-TBI) has been empanelled as a corporate social responsibility partner by Tata Institute of Social Sciences (TISS) Mumbai and Central public sector enterprises. The move will make T-TBI eligible

for projects under the National CSR Hub, being hosted by TISS. National CSR Hub is a centralized system set up by TISS and the Department of Public Enterprises, Government of India, where core functions of CSR including learning and knowledge dissemination are carried out. The hub carries out activities in a partnership mode involving TISS, civil society organisations, and the public enterprises concerned.

The incubator can now design and submit CSR activities in the State in areas such as entrepreneurship education, entrepreneurship development and skill development for Central PSEs that have signed up with the CSR hub.

Kerala start-ups launch e-Tutor tablet Two Kerala-based IT firms – Cell Technologies and Oztern Technologies – have come up with e-tutor, India’s first cloudbased tablet solution for school children. The tablet, meant for students from Class 1 to 12, will cost `7500 inclusive of content.

It will enable teachers easily explain topics using a digital white board that is set up in the tablet PC. The students can discuss topics and also access the topics taught in the classroom later. Regular content updates will be made available through the Internet. The device will restrict access to only the relevant locations on the Internet, making it safe for children.

13

project tracker

High Speed Rail gets Central nod

The Central government has given the go ahead to the high-speed rail corridor project, extending from Thiruvananthapuram to Mangalore.

The State has been asked to prepare a Detailed Project Report (DPR) of the scheme. The 580 km-long rail corridor will have a carrying capacity of 15,000 people per hour, and would traverse the length of the State in 2 hours, with trains running at speeds of around 300 km/hr. The project is estimated to cost `1.18 lakh crore. Mr T. Balakrishnan, chairman and managing director of the Kerala High Speed Rail Corporation said that the work on the project is expected to begin in 2013. The corridor is expected to be commissioned in 2020.

The first phase of the project will link Thiruvananthapuram and Kochi and is expected to be complete in 5.5 years. The Delhi Metro Rail Corporation is preparing a report on the project which is expected in six months time.

CPT goes ahead with ship repair facility Seven companies have expressed interest in setting up a ship repair facility at Willingdon Island in Kochi. The companies that responded to the Expression of Interest (EoI) invited by the Cochin Port Trust 14

included the Cochin Shipyard and the Sultan Marine International, Bahrain. The facility is proposed to be set up on 45 acres of land on the south end of the Willingdon Island with 850 m of waterfront on the Mattanchery channel. It will be able to service commercial vessels, offshore supply and service vessels, Coast Guard and Navy vessels, Port service vessels and dredgers of an overall length up to 165 m and beam width up to 26 metres The CPT already runs a basic ship repair facility close to the Mattanchery wharf. It plans to lease the equipment, dry dock and workshop facility to the selected operator. The facility will be set up on a builtoperate-transfer basis. The operator will have to develop the yard and bring in the required infrastructure for carrying out ship repair activities.

Ship repair is a booming business the world over with the expansion in maritime trade. The size of the ship repair business in India is estimated at `3000 crore, but the country is able to get a revenue of just `500 crore from the business due to capacity constraints. Only two ship repair facilities – one at Cochin Shipyard and the other at Mangalore – are present in South India today and vessels depend on Colombo for most of their requirements.

Conditional clearance for Skycity project The State government has granted clearance to the proposed Skycity project at Kochi, subject to certain conditions on the shareholding structure and the cases pending in the courts. As part of the deal, the

State government will have 26 per cent stake in the project, while 23 per cent stake will be offered to the public. The promoting company will build, own and maintain the infrastructure on a 99-year lease.

Proposed by the Yesoram group, the Skycity is essentially a 4 km long flyover bridge that runs 30 ft over the Kochi backwaters. As per the plan, the project will extend from Kundannoor in the south to Sahodaran Ayyappan Road in the north. The 42-metre wide structure will have a 12 m wide four-lane expressway along with three storeys of shopping complexes, residential apartments and commercial hubs. The project is with an outlay of `6,000 crore. The Yasoram group claims the project would reduce the traffic congestion in the city and provide a boost to the tourism sector.

Welspun-Leighton sole bidder for Vizhinjam The Kerala Cabinet has given the green signal for consideration of the financial bid of the consortium led by Welspun-Leighton for the Vizhinjam International Transhipment Project.

The Union Home Ministry had denied clearance to Mundra Port and Special Economic Zone, one of the two consortia whose technical bids had been accepted by Vizhinjam International Seaport Limited, the SPV that oversees the project. The project aims at developing and operating a `2,620 crore multipurpose port. The Welspun consortium includes Welspun Infratech Ltd, Welspun Corp.

Ltd and Leighton Welspun Contractors (India) Pvt. Ltd. The port will have a capacity to load 2.8 million standard containers and 1.8 million tonnes of other types of cargo, excluding containers, a year.

The first phase of the project comprises the design, engineering, financing, development of superstructure such as buildings and cargo handling equipment at the port as well as the operation, maintenance and management of the terminals at an estimated cost of `970 crore.

Rail coach factory

The wait ends

The rail coach factory coming up at Kanjikode, Palakkad could change the industrial landscape of the State

T

he wait is over. Finally. When the foundation stone was laid for the rail coach factory at Kanjikode in Palakkad district, it marked not just the launch of an ambitious industrial project. It also meant the fulfilment of a promise made three decades ago by the then Indian Prime Minister.

The factory, to be built in the public-private partnership model, entails a total investment of `550 crore. The Indian Railways will hold 26 per cent equity in the joint venture which will take up the project; the rest will be brought in by the private sector partner. The Union government has decided to float a global tender to select the private partner.

The work on the project is expected to begin this year and be completed within 36 months.

The factory will be equipped with the most modern technologies for coach manufacturing. It will manufacture low weight aluminium coaches for the railways. In the first phase, the factory will have a capacity to manufacture 400 coaches a year.

The capacity will later be increased to 600 coaches a year. In his inaugural speech, Union Railway Minister Dinesh Trivedi said the factory is expected to be the best in the country and would be a landmark project

The factory is expected to provide direct employment to 3,000 persons and indirect employment to another 5,000 persons in the ancillary industries

for both Kerala and the Indian Railways.

The coach factory is expected to help the overall development of the State. The Palakkad district, where the coach factory will be located, and the adjoining Thrissur district would be the main beneficiaries. More than 100 ancillary units are expected to come up in the vicinity to make spare parts for the coach factory. The factory is expected to provide direct employment to 3,000 persons and indirect employment to another 5,000

Union Railway Minister Dinesh Trivedi unveils the foundation stone for the Kanjikode railway coach factory in the presence of Chief Minister Oommen Chandy and Minister of State for Railways K H Muniyappa persons in the ancillary industries.

In 1980, Indira Gandhi, then Prime Minister, had promised to set up a coach factory in Kerala, but later the government shifted the location to Kapurthala in Punjab. Successive governments promised to compensate Kerala, but nothing moved on the ground. The latest promise came when the Palakkad Railway Division was bifurcated to form the Salem Division.

The project being implemented now has undergone drastic changes

More than 100 ancillary units are expected to come up in the vicinity to make spare parts for the coach factory from the original proposal. It was to be set up by the Railways at an investment of `5,000 crore; however, as it stands now, the project will take the PPP route, and the investment is one tenth of the original.

A high level meeting called by the Cabinet Secretary had decided against equity participation in the project by the State government.

The State government had acquired 431 acres of land at Kanjikode and given it to the Railways last year for setting up the Coach factory, in exchange for equity in the project. The Railways has now paid `33.70 crore to the State government for the 239 acres of land it needs for the project, instead of giving it equity participation in the project.

According to railway officials, the Planning Commission has directed that all future development projects should be through the PPP route and hence the decision to follow the PPP route for the execution of the project. The joint venture partner, selected through the tender process, could bring in the latest technical know-how along with capital which could help production and export of coaches and mass rapid transit systems, they said.

The factory stands to gain from its proximity to the Kochi and Coimbatore airports, Vallarpadam ICTT and the Malampuzha dam which will prove to be a reliable source of water.

15

Infrastructure

Vegetables waiting to fly off

Export fresh I

Aby Abraham G K

t all started with a phone call in early 2004 that Mr George Koshy, then in charge of the Agricultural Products Export Development Authority (APEDA) centre at Thiruvananthapuram, made to Mr V J Kurien, managing director of Cochin International Airport Ltd (CIAL), asking if the airport had a cold storage facility. CIAL at that time had some walk-in-coolers, but not the kind of sophisticated systems for handling perishable cargo such as fruits, vegetables, flowers and live stock products. Asked if he would like to have one at CIAL, Mr Kurien remarked that he would welcome one, but must be heavily subsidised.

APEDA, the Central government agency with a mandate to finance and develop industries that facilitated agricultural exports, jumped at the opportunity.

Things moved quite fast after that. The CIAL, though had little exposure to the concept, burnt the midnight oil and came up with a detailed project report for the centre. The report impressed the bosses at APEDA, who sanctioned the setting up of a centre with a grant of 16

`13.2 crore. The total project cost was around `24 crores, with CIAL putting in the rest.

The 20,000 sq ft Centre for Perishable Cargo (CPC) started operations in 2009. The move benefitted not the just the bottom lines of CIAL, but the whole State. Says Mr Rajan Thomas of Thomson Export & Import who uses the facility to export fruits and vegetables, “Such facilities are present in most of the airports abroad. CIAL has made a good start with the perishable cargo centre.�

The CPC has the capacity to handle 25000MT of exports materials such as fruits, vegetables and flowers a year. The facility has three

The Centre can handle about 100 MT of perishable cargo a day.

Bananas account for almost 50 per cent of the total export, with a variety of vegetables and fruits of Kerala origin making up the rest

The Centre for Perishable Cargo at Cochin international airport is helping farmers export their produce in garden fresh condition main segments - the receiving bay, the weighing and computerised examination bay and the security-cumstuffing bay. The temperature at the facility is maintained at 18OC; the humidity is controlled to prevent the cargo from losing its freshness and getting damaged.

The Centre also has three internal storage cubicles, each capable of storing 15 tonnes of cargo. The temperature in one of the cubicles can be maintained even at -10OC, while the remaining two have a temperature of 2-16OC. The humidity inside these cubicles is also controlled.

Getting the facility ready was the easy part, but getting the stakeholders to use the facility to export fruits and vegetables was tough. Exporters usually need to get at least 1000 kg of produce a day to satisfy their clients. And they have contracts that run for six months and more. Getting such a huge quantity of produce at the contracted price for a long duration was difficult in Kerala where the land-holdings are small in size.

This, coupled with the lack of temperature-controlled storage and processing facilities, had made export of perishable agriculture products from Kerala a troublesome affair.

Having made the facility, the CIAL took proactive steps to create customers. It joined hands with the National and State Horticultural missions and selected the Parakkadavu Block Panchayath situated near the airport for implementing a pilot project for cultivating vegetables and fruits exclusively for exports. The State Horticultural Mission, the local self-government bodies and the agricultural department came forward and formed clusters of women farmers who could cultivate a minimum of 50 cents each. Together they could provide the produce in the required scale.

As part of the project, farmers were given high-yielding Nendran banana saplings to cultivate under the guidance of officials from the department of agriculture.

CIAL not only found the cultivators, but also identified potential buyers for the products. It roped in M/s Fair exports, part of the EMKE group that runs supermarkets all over the Gulf, to procure the produce from the farmers and export it.

The price expectations of the farmers also had to be moderated, so that the arrangement was attractive to both the farmers and the exporters. “The experiment went on just fine, and established the feasibility of exporting perishable cargo through CIAL,” says Mr Koshy, who is currently Head – Cargo of CIAL. The farmers also got a price that was higher by `1 to `2 a kilo than that in the local market.

Today many items are exported through the CPC. “We export fruits and vegetables through the perishable cargo centre at CIAL,” says Mr Thomas. Bananas account for almost 50 per cent of the total export, with a variety of vegetables and fruits of Kerala origin making up the rest.

Fish products are also exported. “We can handle 80-100 MT of perishable cargo a day,” says Mr Koshy.

The CPC has enough domain knowledge in handling the perishable cargo. Last year the Centre handled a consignment of live ornamental fishes destined for Chicago, USA.

The market for Indian fruits and vegetables are expanding abroad

What is perishable cargo?

G

oods that deteriorate over a given period of time, when exposed to adverse temperature, humidity or other environmental conditions are called perishable cargo. Fruits, vegetables, flowers, dairy products, fish and meat are common perishable goods that are exported from India.

Vegetables and fruits start deteriorating immediately after they are harvested. This happens due to a variety of factors such as physiological breakdown due to natural ripening processes, water loss, temperature injury, physical damage, or invasion by microorganisms. Temperature and humidity are the most significant of them.

Each fruit/vegetable has an opti-

mum temperature and humidity range that will slow down its deterioration and retain freshness.

For increasing the shelf-life, they have to be moved to the optimum temperature and humidity range immediately after harvesting and maintained at that level during transportation and storage, till they are consumed. A high temperature will hasten deterioration and may cause heat damage, while chilling injury might occur if the product is stored at too low a temperature, leading to rejections when exported. Hence temperature and humidity controlled storage facilities are required for storing and handling perishable cargo, especially for export markets.

The security-cum-stuffing bay at the Centre 17

Kochi can be made a transition point for multimodal cargo from all over the world as Singapore today is, says Mr George Koshy, Head- Cargo at CIAL Since there are no direct flights from Kochi to Chicago, special arrangements were made for minimising the waiting time of the consignment at the airports in between and to enable easy transfer of the same at the transit point. And the results were fantastic. “Not even one of the fishes in the consignment died during the transfer, against the usual mortality rate of 20-25 per cent,” Mr Koshy said.

It is not just the produce from Kerala that goes through the airport today. The neighbouring States also benefit. “The availability of fruits and vegetables in the State is seasonal.

So we often procure them from the neighbouring States also for export,” says Mr Thomas.

Other products from neighbouring States could also be exported

CIAL is planning to set up a cargo village, where all the four modes of transport – air, water, rail and air – converge. Once that is ready, sea to air and air to sea transfer of cargo would also be possible

18

through CIAL as it is the nearest international airport for the industrial centres of Coimbatore and Tirupur in Tamil Nadu. Industries there could save cost and time if they send their consignments through CIAL, instead of sending it to Bangalore/ Chennai airports, located twice afar.

They fear the delays at the Walayar check post, but are unaware of a separate queue allowing easy passage for bonded custom trucks coming to CIAL. The CPC offers an opportunity to importers also. “Today Washington oranges and apples from Australia are first flown to Mumbai and then come to the State by road. Instead, they could be flown to Kochi and distributed all over south India at a much cheaper cost,” says Mr Koshy.

Opportunities available The cargo handled at CIAL has increased around 10 times – from 3,950 MT in 2001-02 to 34,153MT in 2010-11 - in the last decade. Buoyed by this success, CIAL is planning a series of steps to increase the cargo traffic. The Electronic Data Interchange-Message Exchange System (EDI-MES) which enables electronic interchange of messages between customs, air cargo complex(ACC) of CIAL, exporters, importers, custom house agents, airlines and banks, has already been implemented. This has helped increase transparency and realised savings in time and cost for everyone involved. It is also planning to set up an agricultural information centre in partnership with different stake holders such as government departments, commodity boards, researchers, exporters and farmers. A commodity exchange for perishable items is also being planned.

CIAL has also opened an exclusive parking bay for cargo freighters, next to the ACC. The facility – a first in the airports in the country – was started with financial assistance from the State and National Horticultural missions. The airport hopes that the exclusive parking bay would attract more cargo freighters to the airport

The government has allowed a separate queue at Walayar for bonded custom trucks coming to CIAL, but the truck drivers and the officials at the check post are unaware of the facility

and help start cargo services on a daily basis.

But all this is small if you consider the potential that exists. “Today if a consignment has to reach its destination in one month, and sending it through a ship takes 1.5 months, the sender will have to rely on air freight and pay a higher freight cost. If a sea-to-air transfer facility is available, the consignment could be send by sea to a nearby seaport, transferred to an airport, and then sent by air freight or vice-versa. This would enable huge savings in cost for the exporters, while meeting deadlines with respect to time,” says Mr Koshy. With this vision, CIAL is going ahead with the concept of a cargo village, where all the four modes of transport – air, water, rail and air – converge. The Seaport-Airport road connecting CIAL with the Cochin port is already in use. Rail connectivity can be easily provided to CIAL as a railway line already passes adjacent to it. The Inland Water Transport Authority has already conducted a preliminary survey for establishing a water link to the Vallarppadom ICTT, through the Periyar river that flows nearby. Once that is ready, sea to air and air to sea, transfer of cargo would also be possible.

Says Mr Koshy, “Kochi can be made a transition point for multimodal cargo from all over the world as Singapore today is. It may sound an outlandish idea today, but it is practically possible.” The State’s future rests on such outlandish ideas.

For even CIAL looked like one some time back.

KSIDC NEWS

Wooing investors

Kerala Pavilion attracts NRI investors at Pravasi meet

The Kerala pavilion at the Pravasi Bharat Divas held in Jaipur

T

he Kerala Pavilion at the Pravasi Bharat Divas, held in Jaipur, was the focus of attention of the non-resident Indian delegates who attended the biggest gathering of NRIs in India.

One of the largest pavilions set up by a State, the Kerala pavilion offered information on the investment opportunities the State offered.

Kerala State Industrial Development Corporation (KSIDC) and other agencies such as KINFRA, NORKA, Tourism and IT depart-

Kerala State Industrial Development Corporation (KSIDC) and other agencies such as KINFRA, NORKA, Tourism and IT departments showcased their products and projects in the pavilion

ments showcased their products and projects in the pavilion.

A large number of visitors showed interest in various sectors of the State’s industry, including tourism, information technology, education, healthcare and food processing.

There were enquiries from investor community on the proposed Emerging Kerala – 2012, the threeday global connect being held September 12 this year in Kochi.

The Kerala delegation, led

by Chief Minister Mr Oommen Chandy, made a presentation on the investment opportunities in the State. The Chief Minister, who also addressed the session ‘Global Indian: State Initiatives and Opportunities’, spoke on the institutional support offered by the State government for investors with a special focus on the non-resident Indian investors.

The Chief Minister said that a Non-Resident Keralite Bank and an NRK university were under the active consideration of the State government.

The Chief Minister said the di-

aspora played an important role in the development of the State. Mr Chandy recalled that remittances by non-resident Indians to Kerala were to the tune of Rs 49,965 crore, which is almost 22 percent of the State’s gross domestic product (GDP).

The Chief Minister also offered to host the next Pravasi Bharatiya Divas in Kochi.

Several leading industrialists from all over the world attended the meet. Minister for Planning, Rural development & Culture Mr K. C. Joseph, prominent NRK industrialists Mr M A Yusuffali, Mr C K Menon, Mr Ravi Pillai and Mr P Mohammed Ali attended the meet.

The Chief Minister said that a Non-Resident Keralite Bank and an NRK university were under the active consideration of the State government

Chief Minister Mr Oommen Chandy addresses the gathering of investors 19

Showcasing Kerala Emerging Kerala will present opportunities in 10 core sectors before investors

E

merging Kerala, the global connect in which stakeholders of Kerala economy are expected to converge and brainstorm, will see the State government showcasing 10 core sectors with potential for faster growth. The government will also present some key investment proposals, which would seek to alter the industrial profile of the State before the investor community.

The three-day global investor meet will be held from September

12 in Kochi in which academicians, administrators, investors, entrepreneurs and consultants are expected to attend. The government has already roped in Confederation of Indian Industry (CII) as a partner for the programme.

The government has identified the core sectors as they offer immense scope for growth in the long term and are expected to help the growth of the State as a knowledge economy. The State has inherent

strengths in all these sectors compared with its neighbours, according to sources in KSIDC, which is the nodal agency for the event. The sectors are: IT and IT-enabled services: The State which first put up a dedicated facility for information technology industry in the country by launching Technopark Thiruvananthapuram, is betting it big on the sector now. The State has a robust infrastructure backbone for the in-

KSIDC managing director Alkesh Sharma and CII regional director (southern region) Sujith Haridas after signing the MoU in the presence the Minister for Industries & IT P K Kunjalikutty

20

Emerging Kerala is conceived as a biennial event in which thought leaders, influencers, visionaries, investors, enterprises, government institutions and the general public come together to think about Kerala dustry as it hosts the landing points for two undersea cables, SEA-MEWE3 and SAFE. The State which has 98 per cent of its panchayats connected to the broadband network, is developing more than 2000 acres of land for the industry across the State. They include developed land, ready-to-occupy infrastructure and plots available on long lease. A number of private IT parks are also coming up in the State to cash in on the increasing demand for IT infrastructure. The climatic conditions, the very strong social infrastructure and the tag as a prime tourist destination add to the attraction of the State.

Tourism: Kerala Tourism, which pioneered the concept of privatepublic participation for the common benefit of the economy, is now betting it big on niche segments. There are ample opportunities in the State for heritage tourism, farm tourism, experience tourism etc. The Musiris heritage project is one such mega project which seeks to recreate the historical importance of the place.

Healthcare services: There are several reasons why Kerala has started attracting the attention of global players in health care: The State has excellent air and road connectivity; has one of the best climatic conditions among Indian States and healthcare professionals from Kerala work all over the world. Several groups have already announced their plans to set up facilities to at-

tract medical tourists to the State.

The government is also planning to promote Ayurveda, another unique offering of Kerala in the healthcare sector.

Food and Agro Processing: Kerala, the land of spices, is known for a variety of agro products. The food processing industry is one of the fast-developing sectors, with established markets both in India and abroad. The Vallarpadam International Container Transshipment Terminal and the Centre for Perishable Cargo at Cochin International Airport facilitate export of food and agro products.

Ports, shipbuilding: Having set up the first ICTT at Vallarpadam, the ports sector in the State is set to witness hectic activities. The government is designing a coastal shipping project which envisages developing six minor ports and the Vizhinjam Deep Sea Trans-shipment Terminal. The project, when complete in 2017, is expected to take 20 per cent of cargo movement off the national highways in the State. The government is also planning to set up a ship-building unit in addition to the Cochin Shipyard.

Knowledge/Education sector: Kerala owes its success in achieving high rates in human development indices, thanks mainly to the emphasis it has given to the education system for over a century. The State would now seek to extend its gains and make it a knowledge economy.

It is a fertile ground for establishing educational institutions and research and development organisations. Its excellent air connectivity and moderate climatic conditions could make it a destination for international students. That the State hosts one of the 25 biodiversity hotspots on earth is a point of attraction for R&D institutions.

Energy, including Green Energy: The high rate of growth of the economy and the increasing economic activity call for additional investment in the power sector. The

State is eyeing power projects based on natural gas, set to arrive at the Petronet LNG terminal in Kochi in 2013. Given the sustainable development pattern it follows, it also seeks increased investment in green and alternative energy.

Bio-tech, Nano tech & other sunrise sectors: The high concentration of R&D institutions and the availability of trained manpower make the State an ideal destination for biotechnology and nano technology companies to start their units here. They can draw from the vast pool of technologists and researchers the State has produced over the decades.

Water technologies & Inland waterways: One of the unique features of Kerala is the presence of water bodies that connect the length and breadth of the State. The State had once depended largely on waterways for the movement of men and materials. It is now aggressively pursuing that option again as waterways offer a very viable and eco-friendly mode of transport.

Infrastructure development: Kerala envisages the need to strengthen infrastructure to spur growth. It already has a good network of roads but with the practical absence of a town-village demarcation, there is high demand for the provision of urban facilities in rural areas as well. This offers investment opportunities in sectors such as roads, power, water management, sewerage, waste management etc.

Kerala is developing more than 2000 acres of land across the State for the information technology industry.

They include developed land, ready-to-occupy infrastructure and plots available on long lease

21

Corporate Results South Indian Bank net up 36%

South Indian Bank has reported a 36 per cent yoy increase in net profit from `75 crore to `102 crore for the quarter ended December 31, 2011.

The profit growth was driven by a 33.5 per cent yoy growth in net interest income to `2,734 crore and a 20.4 per cent yoy growth in non interest income to `59.9 crore. The bank’s advances increased by 30.6 per cent yoy to `25,050 crore, while deposits went up 2 per cent to `33,834 crore during the period. The Net Interest Margin of the bank was 3.05 per cent during the period.

Federal Bank profit grows 41%

Federal Bank has reported a net profit of `202crore for the third quarter of the financial year – a growth of 41 per cent over the same period in the year before. The total income also recorded a 40.3 per cent yoy growth to `1,604.76 crore during the quarter. The total deposits in the bank increased by 26.63 per cent from `36,913.53 crore to `46,742.46, while advances increased 17.59 per cent from `28,240.02crore to `33,206.07 crore. The net interest margin for the quarter was 3.94 per cent.

V-Guard Industries reported a yoy growth of 45.61 per cent in net profit for the third quarter, on the back of a 45.27 per cent growth in sales. The company’s profit for the quarter was `12.45 crore against `8.55 crore reported in the corresponding period of the previous year. Sales for the quarter grew from `176.87 crore to `256.94 crore.

Dhanlaxmi Bank slips into the red

The going has been good for other banks in the State, but Dhanlaxmi Bank has been an exception. It reported a net loss of `36.87 crore during Q3, 2011, as against the `7.26 crore profit reported in the same period of the previous fiscal.

Total income for the bank increased 38 per cent from `283.22 crore to `390.85 crore, in the period, but expenses grew much faster at 60.1 per cent from `265.57 crore to `427.31 crore to push the bank into the red.

A 70.6 per cent increase in interest costs, from `176.29 crore to `300.76 crore was the main reason for the rise in expenditure.

Muthoot Finance Q3 profit jumps 61%

V-Guard Industries net up 45.61% Muthoot Finance Ltd’s total income grew 91 per cent to `1,231crore during the December quarter, up from `645 crore recorded in Q3 last year.

But the rising interest costs – up 2.58 per cent – impacted the net interest margin which fell 0.43 per cent, and 22

dampened the profit growth. The net profit for the December quarter increased at 61 per cent yoy to `251crore from `155 crore in the same period of the previous fiscal.

Muthoot Finance has 3480 branches spread across the country today and manages loan assets of `22,885crore.

Manappuram Finance Limited net zooms 117% Manappuram Finance Limited reported a net profit of `161.37 crore for the quarter ended December 2011, up 117 per cent from that reported in the same period the year before. Total assets under management increased to `12,358.21 crore, while operating income increased 120 per cent to touch `726.40 crore.

The company opened 235 new branches during the quarter, taking its total number of branches to 2,738.

The company has also announced an interim dividend of `0.50 per share.

Geojit profit falls

Geojit BNP Paribas Financial Services reported a lower net profit of `4.99 crore for the quarter ended December 11 – down from the `11.26 crore reported in the same period of the previous fiscal. The fall in profit was due to a fall in sales turnover.

The company’s sales fell from `69.12 crore to `45.15 crore during the period, a fall of 34.68 per cent.

JRG Securities sinks deeper into the red JRG Securities reported a 53.94 per cent fall in its sales turnover from `10.01 crore to `4.61 crore in the third quarter of 2011. Consequently, the company moved deeper into the red, with net loss increasing from `2.04 crore in Q3, 2010 to `3.56crore in Q3, 2011.

23

BUSINESS CALLED LIFE

It’s not just men who go for fishing to make a living.

Women in the Mulavukad village, off Kochi, contribute to the family income by catching fish in the backwaters. Theirs will be the simplest form of fishing as most of the time they carry no equipment, and catch the fish with hand. (Some, however, rarely keep a small net). The only regular accompaniment is an aluminium pot in which they collect the catch. They spend up to seven hours a day, hunting muscle, prawns, pearl fish etc. Their earning varies from `100 to `150 a day. In the picture, Bhavani, 70, shows the days catch.

24

Photo: Sivaram V.

25

cover story

26

Mr Thomas Francis Thekkath finds shopping from home a viable option. “If you are a careful shopper, Net is a convenient place to buy your stuff from. It has made the world one single store,� he says

Weaving the Net For many generations, the word Amazon meant the world’s largest river flowing through those wild South American jungles. For the GenNext, it’s the world’s largest online retailer. In Kerala too.

The Malayali consumer has also got on to the Net bandwagon

T

Aby Abraham G K

hose were heady days. The cold war had melted away. Walls had broken down. The geeks had inherited the world. They wired it up with cables. The world logged on to the Internet. And life was never the same again.

The Internet threw up myriad opportunities for the enterprising ones.

From being a great way to share information, it soon morphed into a medium for trade. And e-commerce – the trade that happens on the Internet, when the buyer carries out some transaction on the seller’s website – was born.

The dotcom boom, which betted big on everyone turning to the Net, however, soon went bust. At a time when broadband Internet was a super luxury, payment gateways were hard to pass, and the target customers were people 27

Ms Sumi Thomas does not believe the touch-and-feel theory alone works for shopping. “I buy branded clothes online,” she says

who grew up the conventional way, the migration to the cyber world was a tough challenge, despite the promises it held.

But after a decade, the boom is back, offering many advantages to the customer over conventional modes. And people flock to it the world over for every conceivable requirement. Kerala, which has wired even its villages, does not lag behind.

From books and clothes to computers and condoms, today there is nothing that Keralites do not buy online.

Like Mr Thomas Francis Thekkath. A busy professional with Ernst & Young, Kochi, Mr Francis’s busy schedules often keep him off home and shopping adventures. And he is not complaining.

“I do not have the time to go around shops,” says he. “Instead, I log on to the websites of good companies to do shopping,” he said.

He shops computer accessories most. “I also shop for consumables, CDs, books, car perfumes and household utensils.” The number of items on the list increases as more sites start vending more items.

28

Ms Sumi Thomas, CEO of Dropcap, a content management company in Kochi, rejects the classical arguments against net purchases.

“I do not believe only the touchand-feel theory works for shopping,” says she. “Clothes, especially branded ones, are safe to buy online.” One often needs to do size correction even if it is bought from shops, she reasons.

An expectant mother, Ms Thomas has of late turned to the Net for most of her purchases. “For my daughter’s birthday, I bought everything online, from the party materials to return gifts.” She has already done a bit of online shopping for the soon-to-join member of the family.

“It has always been a wonderful experience shopping online,” says

Choice, price, access, delivery, quality: online stores ensure that they meet all the essential conditions of a customer to entice her

Mr Maneesh Raghavan, second year PGP student at IIM, Kozhikode.

“Considering the time constraints and limited choices available outside, online shopping has been an asset to us. Be it getting branded Tshirts, which are not available in the proximity, from www.inkfruit.com, or getting books from www.flipkart. com, or be it booking tickets online through sites, things have become way too simple.”

Mr Vijo Varghese, an NRI now based in Kochi, says he turned to www.flipkart.com because the book Losing my virginity-An autobiography

by Richard Branson was not available at the book-stores in Kochi.

“The best part is the fact that I was allowed to do pay-on-delivery, very comforting as I don’t even need to provide banking information online.

Simply choose the book, provide my address and request the book to be delivered. The huge discount was another attraction: I paid only `247 (including delivery, and a free bookmark) for the book against the original price of `450.”

Mr Varghese says one of his friends takes pictures of the shoes he

likes and then searches for them on www.bestylish.com and gets them at a much lower price than what is available in stores.

Go for deals Many a time Mr Francis has come across offers which are not available in shops. They offer variety and huge discounts.

“I could not find a car perfume which I noticed on one of my tours, in shops even in the metros,” said Mr Francis. “I just tried my luck on the Net and found it. I bought half-adozen bottles. Several of my friends also bought the same stuff from the Net.” Mr Francis lists the comforts of online purchases: “On several rational counts, online purchases offer a better deal than direct purchases.

They include price, choice and delivery. For most items, quality is assured as we mostly buy branded items. Savings on time is an added advantage.”

Like most customers, Mr Francis makes his payment using credit cards. Most sites are secure to make online payments. Regulatory authorities such as the Reserve Bank of India have introduced several security features. Payment gateways also ensure that there is little chance for fraud.

At the same time, consumers are advised to be very careful while parting with their account information. “This is conventional wisdom: You have to be prudent while passing on your personal information.

This is more so on the Net,” says Mr Sanu Joseph, a practising chartered accountant in Kochi. “It is sad that many people still respond to mails from people of doubtful integrity and lose money. One has to be careful, whether it is online or offline,” he said.

Of late, sites, credit cards and payment gateways have become more customer-friendly. “Some sites now offer an extra comfort,” said Mr Francis: “The money will be debited from your account on a purchase but it will go into the account of the seller only when you visit the site again

and authorise payment after receiving the product in a satisfactory condition. If you are unhappy with the product, then you can register a complaint with them and negotiate.

And if you are happy with the product but did not authorise payment or register a complaint, then the money will be credited to the site’s account in seven days of delivery.” The move is expected to increase customer confidence on the web.

Mr Francis says that the net has made the world a single market place. Earlier many of the articles, especially lifestyle materials, were available only in metros. The Net has broken down that barrier. Any article, anywhere in the world can be yours. “That too for a lower price, and that is the beauty of it.”

Be a smart buyer online, advises Ms Thomas. There are excellent offers available online, and they occur once in awhile. “I have bought some excellent designer wear online at huge discounts,” says she. “Even at huge discounts, they are costly, and there was no question of me going for them otherwise.”

One can also bid online, says Mr Francis. “If you like something and find the price way too high, then don’t leave it like that. Bid for it, and if you are lucky, you will get it at cost that you can afford,” said Mr Francis.

“There is no such chance while shopping in stores.” He said he got a pair of sunglasses for an unbelievably low cost. “So I keep bidding.”

Mr Varghese refills his phone credit and gets some freebees, too. “A very simple benefit I get by refilling through this service is that I am provided with many discount e-coupons that I can directly use at restaurants and shopping malls.

How do sellers find the going?

Several newspapers in the country have devised an innovative way to capitalise on their brand name. They have opened online shopping sites, leveraging their brand name and the trust that readers have in them.

The Times of India, Mathrubhumi, Malayala Manorama and The Hindu

Advantages of E-commerce ● Low cost ● More variety of products ● 24 hours shopping ● Home delivery of products. ● Convenient as people do not have to visit the store ● Can easily compare prices at various stores ● Easy to find reviews and opinions of other customers before buying ● Market spread across the world

Types of E-commerce

B2C This represents normal retailing on the Web, selling products through a website to the public, online share broking, etc being examples.

C2B The C2B business model is an example of the power of the Internet. Here, customers can suggest the price, usually through auctions, and companies can decide whether to accept the price or not. Eg: Priceline.com C2C This represents the auction sites such as E-bay where practically anyone can auction their products. The advantage is that you have an aggregation of bidders from around the world, helping you get the right price for the product.

B2B Many large firms, especially technology firms such as Oracle and Cisco today buy all their products on the web. B2B exchanges have flourished on the Web. Ford and GM also had plans to transfer all their purchases to the web.

29

Today India with around 120 million Internet users – roughly 10 per cent of the population – is the third largest internet market in the world by number of users have such sites.

Mathrubhumi started its shopping site two years back. The site usually acts as a platform for sellers to display their wares, earning a commission on each sale. It accepts payments through MasterCard and Visa, and then forwards it to the seller. The product is shipped directly by the seller to the customer. Shipping is free if the value of the purchase is above `500. Customer service issues are handled by the site. “The credibility attached with Mathrubhumi is the main reason behind the success of the site,” says Mr Joseph Boby KJ, Assistant Advertising Manager– Online, Mathrubhumi. “We have given our contact number on the site and people do call us up if there are issues.”

The site has above 7,000 products, from CDs that cost just `30 to paintings that cost `20,000. Astrology Reports, CDs, books and gift items lead in sales. High touch items such as Pattu Paavada also sell in large numbers. “They are usually bought by Malayalis abroad,” says Mr Boby. But would one buy such items on the Internet? “Yes, if it is for someone else, and not for your own use,” he quipped.

It is not just gift items that people use online shopping for. “We have regular customers who repeatedly shop for CDs and books on the site,” says Mr Boby. “That people prefer the convenience of Internet shopping is underlined by the increase in sales during the rainy season.”

Niche products such as Aranmula Kannadi also find takers on the site.

The arrangement has been a huge benefit to many of the producers of niche products from the State. Now 30

they can reach the whole world sitting at their home. The site had started selling electronic items also, but has stopped that due to service issues.

“With more people having access to the Internet, and new technologies such as mobile money coming up, the market is set to explode,” says Mr Boby. The turnover last year grew 50 per cent, he said.

A spokesperson for www. snapittoday.com, a Bangalore-based website that sells accessories online, said the site has a lot of takers from Kerala. “They shop for exotic perfumes and body sprays.” People even order condoms online through the site.

Lessons learnt The new online stores are a smart lot, having learnt their lessons from the dot com bust. They know ecommerce is not just about creating a snazzy website. It requires many skills that traditional retail does not, order fulfillment being the most important one. In traditional retail, customers came to the store, paid the money and carried their goods home. In short, customers themselves took care of order fulfillment.

But in online retail, the retailers have to handle this function, introducing an additional cost to them. Customers are also dealing with a faceless entity on the Internet and errors and disputes can erode their confidence.

In the past, many firms outsourced order fulfillment to third parties, which led to conflicts of interest during peak seasons, when competitors depended on the same vendors.

Another issue was scale. In traditional retail, items are first stocked and then sold, while it is the reverse in online retail. Hence there is a chance that the retailer will not be able to satisfy the orders it has taken in case of a sudden rise in demand.

With huge number of customers placing orders from around the world during festive seasons, this was indeed a huge problem.

Many online retailers such as Amazon and E-bay could tackle such problems and they emerged stronger after the dot com bubble burst. They

ensured that online shopping was here to stay.

For good reasons, too. Today India with around 120 million Internet users – roughly 10 per cent of the population - is the third largest internet market in the world by number of users. The fact that most of them are young and wealthy makes them a market with huge potential.

And the going is only getting better.

The government plans to increase the number of Internet users to 700 million by 2014. Internet speeds have increased considerably. The country is expected to have 175 million broadband connections by 2014.

Other supply side factors have also been addressed. The country today has a large population that uses plastic money. The new generation banks that sprang up in the country were generous in issuing credit cards to the Indian public. They even have a policy of taking the responsibility of the amounts charged in case of theft of card details.

Distribution and logistics infrastructure has also improved a lot.

Courier services sprang up in the country that was once served only by the postal service. And they have extended their service to even many of the remote towns in the country.

Many factors were also at work that bridged the trust gap for ecommerce in India. The tech-savvy IT professionals, who had tasted online shopping overseas, were eager to lap it up here too. Online banking enabled employers to credit the salaries directly to the accounts of the employees. Online trading in shares also started in the country shortly thereafter. It offered huge benefits to

One of the main attractions of the net is the big discount offer.

You could buy a designer wear at 80 per cent discount or half a dozen bottles of a car perfume at the price of one bottle

traders and investors in the form of lower cost and benefits of dematerialisation such as elimination of bad deliveries and frauds that plagued the market. It attracted a whole new generation of young, tech savvy, upwardly mobile Indians to the share markets.

Another major player was the Indian Railways. Online ticketing freed a large number of Indians from the pain of going to the railway station and standing in queues to book tickets. The railway was an online vendor that people implicitly trusted and it played a major role in bridging the trust deficit.

The technology also has gotten better. Websites are today integrated with call centres, which provide instant guidance to customers in case of doubts.

As a result of these changes, ecommerce is once again flourishing in the country. Today the country has many big online players, some of whom are even listed on the NASDAQ. The Indian market has also spawned some online businesses that are endemic to the country.

The future India has more than 800 billion mobile connections today and the growth in Internet connectivity in the country will be driven by the ability to access the Internet on mobile devices. Low cost tablets and smartphones are expected to drive Internet penetration in the country.

The internet speeds on these devices are also increasing, thanks to new technologies such as 3G. Mobile payment systems will also enable users to make payments using their mobile phones. All these factors are expected to give a big push to ecommerce in the country. And the total value of e-commerce in India which was about $5 billion in 2010 is expected to grow 8 fold to $40 billion by 2015.

75 per cent of B2C e-commerce in the world today happens through five firms – Amazon, eBay, AOL, Yahoo and Buy.com. Expanding the business on the Internet by adding more categories of products is very

For Mr Maneesh Raghavan of IIM Kozhikode the convenience online offers is great. “It takes a lot of hassles off shopping.”

You have to be prudent while passing on your personal information.

This is more so on the Net. One has to be careful, whether it is online or offline easy as demonstrated by the likes of Amazon. This makes it difficult for ‘me too’ firms to exist in the market for long. Consolidation is in the air, even in nascent markets such as India, which is experiencing huge growth. Flipkart has bought over Letsbuy in a cash and stock deal said to be worth $20 million.

Type of products sold on the internet What would one buy on the net?

Earlier it was believed that only impersonal, low touch items would sell through the net. After all, Amazon made its mark on the online world through books. The pundits said that customers would go to the nearest store where they could touch and feel items such as jewellery and apparel, before the purchase. Books,

shares, music, tickets - those were the items which would sell well online. But today even high touch items such as ornaments and apparel have a huge online demand. Virtual fitting and catalogue services offered by apparel makers are allowing people to personalize their wardrobe on the Internet.

But the fact remains that the Internet remains the natural channel for sales of some classes for items – digital goods being the prime example. The distribution cost for anything digital –music, shares, software, insurance, tickets – is zero on the Internet. Today customers are switching to e-books, which they can read on e-readers such as Kindle, or print it out at home, if they need a physical copy. Light, easily transportable goods are more preferred for sale on the Internet, than heavy, bulky items.

Products such as mobile phones, tablet computers, consumer electronics, gift articles, are also major attractions. The Amazon logo - an arrow leading from A to Z, representing every product in the alphabet - says it all.

Anything could be sold on the web.

31

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.

32

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: +91 97444 17980 or subscription@economic-update.in ----------------------------------------------------------------------------------------------After all, our opinions ought to change!

33

Technology

Mr S R Nair

The strategic marketing tool

How CRM applications can be used for acquiring and keeping customers

C

ustomer Relationship Management (CRM) is a marketing management practice of identifying, attracting and retaining the most valuable customers to sustain profitable growth. Customer Relationship Management is also the process of making and keeping customers and maximizing their profitability, behaviours and satisfaction.

Today customer demands open equal access, real time specialised information, convenient access, information portability, process & logistics transparency, pricing transparency, global pricing, ability to set prices, choice of distribution channels and control over their information.

Maintaining deep relationship with clients is the key to success of a business. By doing that, a firsttime customer can become a repeat customer, thereafter a client, then an advocate and finally, a partner in progress. However the worst point is that at any point in this process, he could disconnect from the company and therefore, it is all the more important to reiterate the relationship with him.

From the loyal customers, in addition to getting the base profit, companies can earn further by reduced operating cost, increased purchases and getting plenty of referrals.

Therefore a delighted customer can multiply the company’s profitability.

34

Facts on Customers From realistic observation of customers, we understand certain truths. It costs ten times more to do business with a new customer than to an existing one. When the odds of doing business with a new customer are 15 per cent, the chance of doing business with an existing customer is 50 per cent. A typical dissatisfied customer will tell 8 to 10 people about his or her bad experience. It is also true that eighty per cent of complaining customers will do business with the company again, if the company quickly resolves the problem. As much as 45 per cent customers switching suppliers cite customer service issues as the reason for the switch.

The 80-20 principle is valid in sales & marketing too: 20 per cent of the customers deliver 80 per cent of revenues and many times, more than 100 per cent of profits. Existing

CRM practices create customer equity, the combination of brand equity and relationship equity.

To create customer equity, companies need to provide the customer the best experience

customers deliver most of the revenues. However, more attention – and money– is often spent on non-customers. It is therefore important to identify the most valuable customers (MVCs) for the success of the business.

A small net upwards migration of customers can deliver a dramatic improvement in business performance of companies. Five to 10 per cent of the small customers of any company can move immediately to the top. But an upward migration only happens when customers are very satisfied.

Please note that even the reasonably satisfied customers defect. We need to accept the fact that customer success equals business success.

When CRM practice is required in companies? ● Leads generated from expensive marketing campaigns are lost because they were not tracked properly. ● New customers are lost because, after acquisition, the company has not kept in touch with them (Hole in the Bucket Syndrome) ● Business from your existing clients may not happen because company really doesn’t know who they are, what they are buying and what they will need. ● Credibility with the customers may be lost because sales and support team is not fully informed about them and have not done their homework well enough.

CRM forms the biggest strategic asset that the companies can have for effectively implementing its marketing plans CRM practices create customer equity, the combination of brand equity and relationship equity. To create customer equity, companies need to provide the customer the best experience. Customer experience is defined as a consistent representation and flawless execution across all the customer touch points by the company to create a long term positive emotional connect with its customers.

I trust now it is clearly understood that Customer Relationship Management or CRM is a strategic management practice that helps companies acquire, grow and retain customers. In this heavily automated technological word, is there a possibility to automate these practices, thereby increasing productivity and the success ratio?

CRM technology With the advent of intuitive programming technologies, today there exist many software application programmes for managing the relationship with its customers. Software such as Siebel (Oracle), Microsoft CRM, MYSAP (SAP), Salesforce. com, Customer Management (AmDocs) etc. are highly flexible, integrated applications that help companies achieve this objective. There are also CRM solutions available in the open software platform (e.g. Sugar CRM) which need to be customised to suit company requirements.

Technological way to win the customer ● By tracking and managing the sales leads to a closure. ● By documenting all sales cycles, the account info and by creating a knowledge base

● By breaking up disparate functional silos and by tightly integrating all customer-facing processes. ● By keeping continuous track of your customers’ preferences/propensities and using the input to get intimate with him. ● Getting a 360 degree view of the customer and becoming accountable as an organisation How does it help company’s sales function? ● Supports key functions such as contact management, opportunity management. ● Forecasting a 360-degree view of all customer accounts and interactions. ● Automate and organise sales force activities for focused selling and closing, synchronize the calendar, to-do items and contacts so you can access your key accounts.

Helping marketing function ● Supports key functions such as campaign management and analysis, and customer demographic analysis. ● Create prospects lists using an advanced filtering capability. ● Import prospects lists from thirdparty sources ● Create e-mail campaigns & telemarketing campaigns.

● Automatically pass leads to appropriate sales agents to ensure traceability to originating campaigns.

Benefiting customer service function ● Provides an efficient workflow and easy access to information while synchronising customer data across all communication channels. ● Provide self-service and assisted service to optimise resources. ● Create configurable task lists for consistency in coaching customer service representatives. ● Effectively schedule customer service reps by analysing when and how customers contact the company.

Helping Partner Management ● Track and analyse sales made by partners, and track contracts associated with VARs, dealers, distributors and other channel partners. ● Configure partner access to re-

Most CRM applications seamlessly unify information from e-mail, web chat, web forms, PDAs, wireless devices, telephone and fax

35

personal finance stricted information within the company database. ● Auto-route opportunities and incidents to partner representative.

Workflow Automation ● Design and automate replies or confirmations for web forms and email queries. ● Generate leads based on predefined campaigns and customer segmentation. ● Route customer request based on employee skills or customer priority. ● Set times or alarms to remind staff to take specific actions. ● Define escalation processes and notification alerts ● Dynamically add new, or update, workflows without shutting the systems down. ● Define and integrate partner-specific workflow steps.

Business Analysis and Reporting CRM allows users to quickly view pre-configured reports or create new ones to view real-time or historic data for any business function. Powerful business analysis tools such as sales management reporting and analysis, customer service reporting and analysis, e-commerce reporting and analysis, partner management, marketing campaigns, demographic sampling and data integration can be had from the application which shall help companies arrive at informed decisions.

There are powerful web-based CRM applications that give small and mid-sized companies leading-edge capabilities and all the key functionality of a large CRM system, with unprecedented ease of use. Most of these applications seamlessly unify information from e-mail, web chat, web forms, PDAs, wireless devices, telephone and fax.

And it provides complete integration of customers and partners and the front-office functions of sales, marketing, service, as well as accounting, distribution and other back- office activities to give you a complete view of your customers and employees.

The attempt here has been to describe the importance of following CRM practices for acquiring, retaining and growing customers for the sustained success of companies and how it could be automated as an application practice with the help of organisation’s IT infrastructure. The whole infrastructure combined with the knowledge that it brings forth, guide the destiny of companies in this extremely competitive world. CRM forms the biggest strategic asset that the companies can have for effectively implementing its marketing plans.

In IT parlance it is said that while ERP helps you spend your money wisely, CRM helps you make it at the first place.

36

I

t is taxing time again. Income tax pay-outs eat up a substantial portion of the income of salaried persons, especially those in the high income group. The law provides various options for saving tax. If used wisely, they would help an individual to save tax and also bolster their financial security.

Before deciding on a tax saving strategy, a person has to identify their income, the amount of savings already made and amount of tax that they will have to pay. The steps to tax planning are: I Calculating your total income This should include income from various sources such as salary, capital gains, profits and gains from business and profession, income from house property and income from other sources.

II Compute the gross total income This can be done by first excluding the incomes that have been exempted from tax under various sections of the Income Tax Act. Some common examples of incomes that are exempted from tax are, ʘ House Rent Allowance Under section 10(13A), an amount which is the lesser of the following, is exempted from tax as HRA • House Rent allowance (HRA) received • Rent paid less 10 per cent of salary(basic + DA) • 50 per cent of salary if residing in metro cities and 40 per cent of salary in other areas. ʘ Transport Allowance paid to the employee is exempt to the extent of `800 per month or `9600 a year. ʘ Medical reimbursement up to `15,000 per year is tax free.

The individual has to produce the bills for the same to claim the exemption. ʘ Children’s education allowance: Up to `1200 per child can be claimed as children’s education allowance. This allowance is available for two children. In addition, hostel expenditure allowance of `3600 per year per child for a maximum of two children is also exempt from Income Tax. ʘ Professional tax paid by the individual is exempted from tax.

Deductions under Section 80 C Section 80C of the Income Tax Act, 1961 allows individuals to save tax by investing up to a maximum of `1 lakh in specified instruments. The main avenues available for investment under this section are • Provident Fund • Life insurance policies • Equity linked saving schemes (ELSS) • Tax Saving Fixed Deposits • Principal Repayment on Housing Loan • National Savings Certificate • Tuition Fees for two children • Infrastructure bonds • Pension Schemes

Ta xe s

Finding your tax Calculate your income tax before planning to save it ʘ Leave travel Allowance: The amount incurred for travel with family while on leave to any destination in India by the shortest route is exempt from tax, subject to a maximum of the air economy fare or AC 1st class fare. LTA can be claimed twice in a block of 4 years.

III Compute the net taxable income The net income tax can be computed by subtracting the various deductions allowed from your gross total income. Some of the deductions allowed are, • Investments in tax saving instruments allowed under section 80C (see box) of the Income Tax Act, are exempt to a maximum of `1lakh.

• Investment in infrastructural bonds under Section 80CCF are eligible for deduction up to `20,000.

• Premium paid for medical insurance under Section 80D are exempt to the extent of `15000 for self and family. Another `15,000 can be deducted for premium paid for insuring dependent parents (`20,000 for senior citizens).

• The costs incurred for treatment of specified illnesses can be deducted under Section 80DDB, subject to a maximum of `40,000 (`60,000 for senior citizens) • The interest paid on educational loan taken for higher education of the individual, spouse or children can be deducted under Section 80 E • Donations made to notified charitable institutions can be deducted under Section 80G • The interest paid on housing loan, can be deducted from the income,

subject to a maximum of `1,50,000, for loans taken after 1 April 1999.

IV Calculate the tax payable After calculating the net taxable income, the tax payable can be calculated depending on the tax slab that the individual falls in. The income tax slabs for the current year are as follows.

Individual Male (Below the Age 60 Years)

From 1,80,001 to 5,00,000 From 5,00,001 to 8,00,000

NIL

10per cent 20per cent

Above 8,00,000 30per cent Individual Female (Below the Age of 60 Years)

Up to 1,90,000 From 1,90,001 to 5,00,000 From 5,00,001 to 8,00,000

Up to 500,000 5,00,001 to 8,00,000

NIL

10 per cent 20 per cent

Senior Citizen (Above 60 years of age)

2,50,001 to 5,00,000 5,00,001 to 8,00,000

20 per cent

An education cess of 3 per cent has to be added to the tax obtained in this manner.

Based on the tax figures, you can plan the investment you can make in various schemes, if you have not exhausted the limits, specified under various schemes.

STATEMENT ABOUT OWNERSHIP AND OTHER PARTICULARS ABOUT NEWS PAPER FORM IV

ENTERPRISE AND ECONOMIC UPDATE KERALA (See Rule 8 of the Registration of Newspapers (Central) Rules,1956)

1. Place of Publication 2.Periodicity of its Publication 3.Printer’s Name Nationality Address

4.Publisher’s Name Nationality Address

Above 8,00,000 30 per cent Up to 2,50,000

NIL

Above 8,00,000 30 per cent

Tax Slabs

Up to 1,80,000

Super Senior Citizen (Above 80 years of age)

NIL

5.Editor’s Name Nationality Address

:Kochi :Monthly :K J Jacob :Indian :Independent Media, XI/173B, Mulakkampallil Buildings, Kunnumpuram-Civil Station Road, Thrikkakkara, Kochi, Kerala -682 021 :K J Jacob :Indian : Independent Media, XI/173B, Mulakkampallil Buildings, Kunnumpuram-Civil Station Road, Thrikkakkara, Kochi, Kerala -682 021 :Benny Thomas :Indian : Independent Media, XI/173B, Mulakkampallil Buildings, Kunnumpuram-Civil Station Road, Thrikkakkara, Kochi, Kerala -682 021

10 per cent

6.Name and Addresses of individuals : The Newspaper is owned by K J Jacob who owns the newspaper and partners or shareholders holding . more than one percent of the total capital.

20 per cent

I, K J Jacob, hereby declare that the particulars given above are true to the best of my knowledge and belief.

Above 8,00,000 30 per cent

Kochi 20.03. 2012

K J Jacob Publisher

37

We develop, they die It is time developing nations also started taking responsibility for climate change

“W

hile they develop, we die; and why should we accept this?” asked Karl Hood, Grenada’s Foreign Minister, at the Durban Climate Change Meet. He was speaking on behalf of the Alliance of Small Island States (AOSIS), which are threatened by submergence by the rising seas. For a change the insinuation wasn’t against the developed nations, who are often the butt of such attacks. It was against the grouping of the big developing nations—Brasil, South Africa, India and China (BASIC).

We have long believed that climate change is a creation of the West. Very true. Their unhindered use of energy and other resources since the industrial revolution caused the problem. In 1990, the developed nations were responsible for 66 per cent of green house gas emissions.

We were not the polluters and should not be penalised for the mistakes of others. We too had a right to develop and enjoy the fruits of development.

Or so went our argument. And the world accepted it.

Average global temperatures have risen by 0.8 OC in the last century. Consequently, sea levels also rose 15-20 centimetres during the period. The Intergovernmental panel on climate change (IPCC) predicts 38

temperatures to rise anywhere between 1.1OC to 6.4OC, based on different levels of emissions by 2100.

Scientists estimate that the effects of a 4OC rise in temperature would exceed the limits of human adaptation in most parts of the world. Such a rise would destroy natural ecosystems throughout the world, affecting their capacity to support humans.

Alarmed at the predictions, in 1992, countries came together under the United Nations Framework Convention on Climate Change to

The threat of flooding in Kochi comes more from a rise in sea level than from the dam at Mullaperiyar.

Ganga and Yamuna could literally join Saraswati in the pages of history, with the glaciers that feed them melting away

consider strategies to limit global temperature increases and the resulting climate change. Subsequently in 1997, they adopted the Kyoto Protocol that legally binds 38 developed nations to reduce their green house gas emissions by 5 per cent of their 1990 levels during 2008-12. The developing nations were spared though, with only voluntary cuts needed from them. Nations also agreed to limit temperature rises to 2OC from that of pre industrialised levels by the turn of the current century.

Much carbon has escaped to our atmosphere since then. Economic growth in developing nations – China and India to be more precise – has leapfrogged that in developed countries which have been bogged down by multiple problems. Our competitive advantage has ensured that factories that once operated in those nations have shut shop and shifted here. Our lax environment norms and our eagerness to attract investment have aided that shift considerably.

With economic growth came emissions, and the promised voluntary cuts failed to follow. Today the developing world accounts for 58 per cent of the global emissions, having exceeded that of the developed nations in 2008. And their share is

expected to grow. Yes, we are the polluters today. China has overtaken the US to become the world’s largest emitter. And India too hasn’t been short of blame. The emissions from the country tripled during the period 1990-2009. India is today the third biggest emitter in the world after China and the US. The sad fact is that this has happened at a time when the emissions of developed nations are falling. The 2011 report of the International Energy Agency on CO2 emissions states that the emission levels of the countries participating in the Kyoto protocol had declined 14.7 per cent below their 1990 level in 2009. But the total emissions in the world increased by around 40 per cent during the period from 20.9 Gt to 28.9 Gt due to huge increases in China and India.

The rise in the emissions from developing countries has negated the effects of the good work done by the developed countries to reduce their emissions. The refusal of major developing nations – the BASIC nations – to submit to binding regulations at the Durban Convention held recently to create a new treaty in place of the Kyoto protocol that expires this year has complicated matters.

Canada has already walked out of the treaty, joining the US which did not even ratify the Kyoto protocol. Others are threatening the same, risking the future of the treaty. They

cannot be blamed.

China, US and India, the three major emitters, are practically out of the treaty.

Having a treaty that puts no responsibility on the countries which account for the major share of greenhouse gases today is useless. The net result will be that the world will not be able to control its emissions and thereby arrest the average global temperature rise to just 2OC as hoped earlier.

The effects of our failure could be catastrophic. The ancient Indian city of Dwaraka is believed to have been devoured by the sea. Many of the coastal cities of the world could follow its path. The threat of flooding in Kochi and other coastal regions in Kerala comes more from a rise in sea level than from the dam at Mullaperiyar. The mighty rivers such as Ganga and Yamuna could literally join Saraswati in the pages of history with the glaciers feeding them melting away as temperatures rise.

Prevention is better than cure, so the old adage goes. It would be much easier to prevent climate change than to adapt to its effects.

The money which we have to spend today to reduce emissions will be miniscule compared to what we have

to spend to escape the effects of climate change. Indian businesses have the resourcefulness to meet the challenges placed by legal requirements from a binding treaty on climate change, just as it dealt with liberalisation in the 90’s. The government should not deny it that opportunity.

India has any number of firms which take pride in being environment-friendly. Our business leaders should talk some sense into our politicians’ heads. Countries such as India and China, which aim to be global leaders, should act responsibly.

They should take the lead by submitting to legally binding emission reduction targets. After all, it won’t be a case of ‘we developing and they dying’. Our turn too will come soon after.

Today the developing world accounts for 58 per cent of the global emissions, having exceeded that of the developed nations in 2008.

Emissions from India tripled during 1990-2009.

India is today the third biggest emitter after China and the US

39

Kerala statistics

Higher Education in Kerala K

erala is known all over the world for the stupendous feat of achieving 100 per cent literacy. But is not just in literacy and primary education that Kerala is ahead of other Indian States. The State also has one of the highest concentration of science and technology personnel.

A large resource pool that feeds industries at home and abroad.

Technology, Thiruvananthapuram http://www.sctimst.ac.in

Central Institutions in Kerala Indian Institute of Space Science and Technology, Thiruvananthapuram http://www.iist.ac.in Indian Institute of Science Education and Research, Thiruvananthapuram http://www.iisertvm.ac.in Indian Institute of Management, Kozhikode http://www.iimk.ac.in National Institute of Technology, Kozhikode http://www.nitc.ac.in Naval Academy, Ezhimala http://www.indiannavy.nic.in/inaweb/index.html

Research Institutes Central Marine Fisheries Research Institute, Kochi http://www.cmfri.org.in Indian Institute of Spices Research (IISR), Kozhikode http://www.spices.res.in Centre for Water Resources Development and Management http://www.cwrdm.org Centre for Development Studies, Trivandrum http://www.cds.edu http://www.cds.ac.in Kerala Institute of Local Administration http://www.kilaonline.org National Transportation Planning and Research Centre http://natpac.kerala.gov.in

Rajiv Gandhi Centre for Biotechnology, Thiruvananthapuram http://rgcb.res.in Sree Chitra Tirunal Institute for Medical Sciences and 40

Autonomous Institutes Indian Institute of Information Technology and Management-Kerala (IIITM-K) http://www.iiitmk.ac.in

Universities University of Kerala, Thiruvanathapuram http://www.keralauniversity.ac.in Mahatma Gandhi University, Kottayam http://mgu.ac.in Cochin University of Science and Technology http://www.cusat.ac.in University of Calicut http://www.universityofcalicut.info Kannur University http://www.kannuruniversity.ac.in Kerala Agricultural University, Mannuthy, Thrissur http://www.kau.edu Sree Sankaracharya University of Sanskrit, Kalady http://www.ssus.ac.in Kerala University of Fisheries and Ocean Studies http://www.kufos.ac.in Kerala Veterinary & Animal Sciences University (KVASU) http://www.kvasu.ac.in Kerala University of Health Sciences http://kuhs.ac.in National University of Advanced Legal Studies http://www.nuals.ac.in

Deemed Universities Kerala Kalamandalam http://www.kalamandalam.org

Aligarh Muslim University Campus National Maritime University Campus

Engineering Colleges in Kerala: Govt

Aided

SFC under quasi govt institutions

Private

Total

No: of colleges

11*

3

23

93

130

No: of seats

2954

1520

6465

29680

40619

* including two agricultural engineering colleges under the KAU and KVASU Number of Colleges in Kerala :

Medical Colleges in Kerala No: of colleges/ Seats

Govt + Aided

SFC

Total

Medical colleges 5

13

18

Seats

900

1400

2300

Dental colleges

3

18

21

Seats

140

1060

1200

Homoeopathic Medical Colleges

2+3

5

Seats

100+150

250

Ayurveda Medical Colleges

3+2

11

16

Seats

160+90

560

810

Siddha medical college

1

1

Seats

50

50

No: of colleges

Govt

Private

Total

Arts & Science Colleges

39

150

189

Law Colleges in Kerala

4

1

5

Training Colleges

4

17

21

11

11

Arabic Colleges Music Colleges

3

3

Physical Education Colleges

1

1

41

42

43

`:50 US:$5 RNI No. KERENG02297 Enterprise and Economic Update Kerala, a venture supported by KSIDC