Enterprise &Economic Update Kerala

Vol 2, Issue 5 & 6 June-July 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

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Practising new Ayurveda

I

t’s often said the ancient Indian knowledge base, as evidenced in the classics, surpasses the modern.

The advocates of this knowledge hegemony brandish several concepts — atom-breaking, the pushpaka vimana and the various arrows are some —as its examples. But the reality is that those concepts were seldom practised. Even while one may appreciate such references from the past, one cannot miss the point that our ancestors hardly bothered to work towards adapting the principles to practical use.

Ayurveda is one such precious knowledge base, which unlike others, served India for ages. Until the advent of modern medicine under the tutelage of the Raj, the system was the health-keeper to its people. Under the British, however, Ayurveda got little encouragement.

Governments in independent India, too, did not consider it important to look at it seriously. The ancient knowledge base got little promotion either in its core research segment, or in its application.

The private entrepreneurs, however, are now doing the job. While they do little in the field of research, they are rewriting the rules in their application. Now one can find Ayurveda being offered not only in small clinics but in world class facilities with the best global standards in healthcare delivery. Most resorts and high end hotels have an Ayurveda facility; and those who don’t run one on their own, have entered into an arrangement with a reputed service provider. And some, as we have pointed out in the cover story, are not looking for immediate returns.

This is a welcome development. This will help Ayurveda attract better attention from interested people all over the world. The global herbal medicine market is approximately $100 billion, of which 85 per cent is cornered by the Chinese systems. Even in Ayurveda, Sri Lanka poses a major challenge. If India were to take its legitimate share in the business, it needs a thrust from the industry. The government also must come forward and encourage such initiatives.

Contents COVER STORY

24 Game changers When the models who landed in Kochi for the Kochi Fashion Week stepped on to an Ayuveda resort, it turned a new leaf in the history of the indigenous medical science.

Ayurveda no more limits its reach to the villages and massage-seeking foreigners; it is serious about healthcare and also has a role in areas such as beauty care. And the service providers go the extra mile in serving their new-found admirers.

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Contents

15

Beautifully yours

Kerala wants to broadbase, strengthen tourism operations

32 A twist in the tale Satellite rights ensure that small and beautiful films are also commercially viable in Malayalam 34 Swimming with the tide Social media offers many benefits to businesses, but tapping it effectively requires some skill

17 The nutmeg maze An income of `20 lakhs a hectare.

That is what nutmeg offers today.

And farmers are flocking to the crop.

But will the good times last?

36 The equity link The Union Budget 2012, has retained the deduction available for investments made in Equity Linked Savings Schemes (ELSS) for one more year The Other Side 38 A share of the loss Insurance companies have the opportunity to share much more than losses

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The Kerala PWD has kicked off an ambitious project - State Road Improvement Project (SRIP)- to develop 1200 km of roads under it to world standards. The roads will be strengthened and sharp curves straightened. Construction of bridges, culverts, storm water drains and utility ducts for laying cables and pipes will also be taken up.

The roads to be developed under the project have been identified by Wilbur Smith Associates, the consultant. A fast-track system, based on negotiated settlements has been proposed for acquiring the required land for the project. It is estimated that `1,100 crore will be required for acquiring the land for the project. The road development work will cost an additional `4,000 crore.

The government plans to raise funds for the project by floating infrastructure development bonds. In addition, funds for the project, which has already been approved by the Union Department of Economic Affairs, would be raised from the World Bank and Asian Development Bank. Toll will not be levied on the roads developed under the project.

The project would be executed by Road Infrastructure Company Kerala Ltd. – a special purpose vehicle in which the State government holds 51 per cent stake and the Kerala Road Fund Board under the PWD, the remaining 49 per cent. The possibility of public-private partnerships for executing the project is also being explored.

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Your cover story ‘Tree of life’ is an eye-opener. It highlights the fact that the current scenario throws up a rare opportunity for coconut farmers and coconut-based industries in Kerala. I must congratulate Coconut Development Board for the measures they have initiated. It is for the farmers to seize the opportunity now.

Studies have proved that coconut oil is the safest cooking oil and it has many medicinal values. Industries must come up to process the nut for industrial as well as cooking purposes. The Industries and Agriculture departments of the State government must team up with the CDB to take the initiative forward.

C R Raghavan, Kannur Your story paints a very rosy picture about coconut farming. Is it so? Coconut must be the only agriculture produce the prices of which fall at regular intervals for no reason. The situation is very bad now. As a coconut farmer, I would consider your report as a wishful thinking. Unless the government takes concrete measures for ensuring a steady price, it will be tough for the farmers to join the CDB campaign.

Joseph Scaria, Perambra The government and agencies that work for the betterment of the farming community must keep their eyes open on making use of technology. This year, the Kerala High Court ruled that specially designed machines must be used to convert husks from tender coconuts that pile up along Sabarimala pilgrimage route into usable fibre. This is a welcome judgment in that it encour8

ages technology not only to solve a problem, but to make virtue out of nuisance.

If the High Court can order deployment of technology, the government must do more to help the farming sector.

R Ramachandran Nair, Kochi The Western Ghats are one of the 25 ecological hotspots in the world. It also hosts several excellent tourism spots. If we can optimize the potential of the two, without damaging the sensitive nature of the eco-system there, it would add to the state’s attraction as a tourism destination. Since Kerala has an excellent record in law and order, it would be possible for operators to take visitors to every nook and cranny of the State.

V Rajesh Mohan Kochi I used to wonder whether we have so much good news to report from Kerala. There are not many local brands that are known outside the State. At the same time, within the State, they have a very stable business, and serve the economy and the people well. I must congratulate the CII for focusing on our real strengths and creating a ‘Made In Kerala, brand. The success of the campaign will help our new generation to think of entrepreneurship as a serious vocation. It would also help enhance the image of the State outside its boundaries.

Jose Thomas, Kottayam I welcome ‘Emerging Kerala’ as it signifies the government’s effort to attract investment to Kerala. At

the same time, I would also like to know whether the government has done enough home work on the ground, not only from the investment perspective but also from a wider angle, taking into consideration the long-term growth targets of the State. I hope it will prove to be not just an investors’ conclave, but a meeting place of people who are concerned with the future of the State and have the financial and intellectual wherewithal to set and achieve specific targets.

M V Menon, Kollam The column ‘The Other side’ often looks at ordinary issues from a different perspective. I must congratulate Mr Aby Abraham for telling the often unseen side of popular myths. I am not fully convinced when he says farmers must produce less because its immediate results would be calamitous. At the same time, it will pay in the long term as farming will become a profitable profession. My point is that the government must take enough steps to ensure that farmer is not forced into cutting production, something that he loathes to do.

P K Sajith, Kochi

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I say!

“The government gives top priority to PPP (public private partnership) in the proposed mega projects, and it will facilitate land and other statutory clearances for these projects. We are laying more emphasis on industrial infrastructure at par with the global standards” P K Kunjalikutty State Industries Minister speaking at the roadshow in Mumbai to promote the ‘Emerging Kerala Conclave’

“Labour problem and trade union militancy are matters of the past and there is no place for such issues in a highly competitive business environment. Anyway, trade unions have now become disciplined and cooperative” Oommen Chandy, Chief Minister, speaking at the roadshows to promote the ‘Emerging Kerala Conclave’ “The ultimate dream is this so-called dream - that of a toilet design…It should be possible to have a toilet that does not require running water, whose cost is very low and whose smell characteristics are as good or better than a flush toilet” Bill Gates, co-chair of Bill and Melinda Gates Foundation, talking to reporters when he visited India to review the projects being run by his Foundation

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“We should look at it also as the land which has the highest amount of literacy, we would look at it as a land which also has the highest amount of entrepreneurial spirit and also, the land which also has a huge amount of innovation as the centre of its core..sort of a spirit, and that the highest amount of innovations have to be coming from Kerala” Sunil Dutt, India Managing Director, Research In Motion, after opening the Blackberry Innovation Zone in the Startup Village at Kochi “A lot of innovations are happening in the country and Kerala is leading them. A large number of proposals come from individual innovators in Kerala” Harkesh Mittal, Union Secretary, Technology Development Board, on Union government's incubation programme

AT A GLANCE

White babies a minority in US

The United States Census Bureau has recorded more births of non-white babies than white for the first time. Hispanic, black, asian and mixed-race babies made up 50.4 per cent of total births in the 12 months to July 2011.

Asians were the second fastest-growing minority group with a 3 per cent growth rate since 2010.

Minorities numbering 114 million, formed 36.6 per cent of the US population in 2011, and was expected to form half of the population by 2040.

Toyota rides on Prius to the top

Japanese auto giant Toyota has come back as the world’s biggest seller of cars for the first quarter of 2012 on the back of its hybrid car Prius. Demand from the US and incentives provided in Japan for fuel efficient vehicles, drove sales, making Prius the world’s third best-selling car in the quarter. Prius

sales more than doubled to 2,47,230, during the period behind Toyota's Corolla, at 3,00,800, and Ford’s Focus at 2,77,000.

Toyota was the world’s largest automaker by sales from 2008 to 2010, before being hit by the 2011 tsunami.

in Chinese markets.

Swiss banks ease secrecy norms...

Stung by legal action against several of its banks in tax evasion cases, Switzerland is easing secrecy norms of its banks. The Swiss parliament recently approved an agreement with Germany under which Swiss banks will make anonymous advance payments to German tax authorities for undeclared money. It has similar agreements with Britain and Austria. Critics fear that it will lead to a fund outflow from the nation which holds an estimated one-third of the $7 trillion in global wealth kept abroad.

...as rich Americans drop citizenship The crackdown on tax evasion by the US and the tougher asset-disclosure rules under the Foreign Account Tax Compliance Act is causing many rich Americans to renounce their US citizenship.

About 1,780 expatriates gave up their nationality at US embassies last year, up from 235 in 2008.

Joining the list is Facebook co-founder Eduardo Saverin who gave up his American citizenship for the more tax-friendly residency status of Singapore.

US is the only OECD nation that taxes citizens wherever they reside.

China lowers barriers for foreign funds The China Securities Regulatory Commission has issued draft rules that have lowered barriers to foreign ownership of domestic stocks and bonds.

Foreign fund managers with just $500m under management and two years’ operating history can now apply for investment licences. Previously only funds with $5bn under management and a 5 year record could invest

first time in 42 years. Till last year’s tsunami, Japan got around 30 per cent of its power from nuclear plants. The move risks plunging the country into power shortages, but public opinion is still largely against nuclear power.

Electricity companies are bringing old power plants

Japan resurrects old power plants Japan switched off its last working nuclear reactor - the third one at the Tomari nuclear plant leaving the country without nuclear power for the

that run on fossil fuels into service.

Private space flights start

The era of private space flights has begun with the California-based SpaceX sending its own capsule -Dragon - to the International Space Station (ISS) on May 22. It had a 521kg cargo that included food, supplies, computers, utilities and science experiments for the ISS and it returned on May 31. SpaceX hopes to send astronauts to the ISS in three years.

Greeks vote to stay with Euro Europe breathed a sigh of relief as Greeks voted the pro-bailout parties - the centre-right New Democracy Party and the socialist PASOK party –to power, albeit narrowly with 161 of the 300 seats in parliament. The radicalleft Syriza party - which campaigned to revoke the MoU that Greece had signed with the EU for the bailout fund – made huge gains on the back of public anger against austerity programs and the sale off public assets, that were part of the deal.

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AT A GLANCE

Dunkin’ Donuts enters India

After fast food chains McDonalds and KFC, it is the turn of American coffee chains to set up shop in the country.

Dunkin’ Donuts, the USbased coffee and baked goods chain, has opened its first restaurant in India at Connaught Place in Delhi. It has formed a JV with Jubilant FoodWorks, a local player, and plans to open 10 stores in 2012-13 and another 100 the year after. Starbucks had earlier announced its entry into the Indian market in partnership with the Tatas with the first outlet scheduled to be opened in August.

Carmakers fast-track diesel vehicle plans With petrol becoming about 75 per cent costlier than diesel, more customers are now opting for diesel cars, making the number of pending orders for diesel cars cross 2-lakh and waiting period more than a month. And car makers are determined to make hay while the sun shines: Maruti’s 1.5lakh diesel engines per year plant will be ready by mid-2013 and the company is planning to double its capacity the following year. Hyundai too is planning a `400 crore plant that will make 1.5 lakh diesel engines per year.

Sales of diesel vehicles 12

jumped 35 per cent last fiscal while that of petrol cars fell 15 per cent.

dian telecom space and Qualcomm’s technological leadership.

Indians buy less gold now Gold demand in the country fell 29 per cent to 207.6 tonnes in JanuaryMarch, 2012, according to the World Gold Council.

The fall was much lower in value terms at just 3 per cent. Indians imported gold worth `56,650 crore during the period. Jewellery demand during the period fell 19 per cent to 152 tonnes, while investment demand fell 46 per cent from Q1, 2011.

The country imported 969 tons of gold in 2011, worth around `3lakh crore at current prices.

Birla to take over Pantaloon

Bharti buys 49% in Qualcomm’s broadband

Bharti Airtel has bought 49 per cent stake in Qualcomm’s broadband arm for $165 million, a move which will help it match Reliance Industries’ broadband presence. RIL has broadband spectrum in all the 22 circles in the country and is planning a mega launch later this year. The partnership will seek to leverage Bharti’s knowledge of the In-

Aditya Birla Nuvo Ltd (ABNL) will infuse `1600 crore and acquire a majority stake in the Pantaloon format of Pantaloon Retail India Ltd (PRIL), the flagship firm of Kishore Biyani’s Future group. As part of the deal, PRIL will demerge its chain of fashion apparel and accessories stores spread in 35 cities with 65 stores and 21 factory outlets covering total retail space of over 2 million square feet into a separate entity called Pantaloon’s Format.

Hero rides into hospitality business India’s largest two-wheeler maker Hero Group will now manage Marriott International’s first boutique hotel brand, Edition, in India. Mr Pankaj Munjal, managing director, said Hero Motors has synergy plans for the retail, restaurant and hotel businesses of the group. The group operates its retail and restaurant business under the brands Oma and Auma, respectively.

S&P cuts India’s rating to negative Global rating agencies Fitch and Standard & Poors have cut their credit

outlook for India from stable to negative. They cited a slowing economy, policy inaction and worsening fiscal, and current account deficits for the cut. India now has a sovereign rating of BBB(the lowest investment grade) from S&P. The rating agency said there is a one-in-three likelihood of a sovereign credit rating downgrade if the situation remained unchanged. A downgrade will affect the ability of Indian banks and corporates to borrow overseas.

Africa gas to augment energy security

A giant new discovery of natural gas reserves in Mozambique’s oil-rich Rovuma basin is all set to strengthen India’s energy security as Indian firms Videocon and Bharat Petroleum hold 10 per cent each in six blocks in the basin. With gas reserves 20 times that of of KG-D6 basin, gas from Rovuma basin is expected to raise supplies and lower LNG prices the world over.

AT A GLANCE

Shafi Mather is CM’s economic adviser

Mr Shafi Mather has been appointed as the economic advisor to Chief Minister Oommen Chandy. He has been assigned the task of monitoring the implementation of the programmes proposed by Mr Sam Pitroda, the State’s ‘mentor’. Mr Mather is a visiting lecturer at the London School of Economics.

He had worked with the policy and planning wing of the AICC alongside Mr Sam Pitroda and Mr Jairam Ramesh.

NRI deposits flow into the State The banks in the State are flush with funds as Non-Resident Indians (NRIs) are sending money in large numbers taking advantage of the weak rupee and attractive interest rates. The rupee has fallen in value by around 25 per cent in the last 6 months or so. The interest rates on the NRI deposits have also been increased from the 3.5-3.8 per cent in November last year to around 10 per cent now, after the RBI removed controls to facilitate more fund flows into the country in the backdrop of the weakening rupee.

Hedge group floats NBFC The Hedge Group has launched its non-banking finance company (NBFC) – Hedge Finance. The new arm will focus on the under tapped loans against securities (LAS) model unlike other NBFCs that focus on the traditional gold loan business. Mr Alex K Babu, managing director, said 60 per cent its loan book would be LAS, 10 per cent gold loans and the remaining other loans such as vehicle loans and hire purchase.

Kerala had 1 crore tourists in 2011

More than 1 crore tourists visited Kerala during 2011, according to State tourism minister AP Anilkumar. The number of foreign tourists visiting the State increased by 73,720 in the year to touch 7.3 lakh. The number of domestic tourists also increased by 7.86 lakh to touch 93.7 lakh. The State earned an income of `19,037 crore from tourism during the period. Foreign exchange earnings went up from `3,797.37 crore in 2010 to `4,221.99 crore in 2011.

V-Guard joins `1,000 crore club V-Guard Industries

Ltd has reported robust results for the financial year 2011-12. The gross revenue from operations of the company increased

36 per cent to touch `1,006.53crore, up from `737.47crores reported in 2010-11. Net profit for the year also showed a 28 per cent jump from `39.70 crore in the previous year to `50.80 crore in 2011-12. The Board of Directors of the company that met on May 30th has recommended a final dividend of 35 per cent.

Cronos acquires Kerala IT firm Germany based Cronos Group has acquired the Kerala based IT firm Advanced Energy Software (AES) Solutions. AES is a SAP consultancy house that provides services and develops software applications mainly for the industrial and utility sectors. The company had many German clients, and this facilitated its acquisition by the Cronos group.

Kerala to go fully digital Chief Minister Oommen Chandy said that the State plans to go fully digital this year. It will utilise e-governance to deliver efficient and transparent services. As part of the initiative, a file tracking system – IDEAS

- will be implemented at the State Secretariat. All the files in the Secretariat would move in the electronic mode, by March 31, 2013. All government transactions will be through e-mail and every citizen would be given an e-mail id based on the UID (Aadhar). In addition, all pensions and scholarships would be distributed through the banks. Citizens would be able to get information on the file status online, once the system has been implemented.

CIAL to host air traffic control centre CIAL has emerged as a new regional lower area control centre for monitoring and controlling the Indian airspace. The new facility has the state-ofthe-art AIRCON2100 air traffic control automation system that is integrated with radar surveillance inputs from Thiruvananthapuram, Mangalore and Bangalore, providing a seamless, real-time picture of aircraft over a large area. It will also help reduce flying distance and landing interval between flights, thereby reducing fuel consumption, and increasing the airport’s capacity to handle more flights.

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project tracker

ABG Group to develop Azhikkal port Mumbai-based ABG Group will construct the cement terminal at the Azhikkal port. The group with interests in ship-building and cement manufacturing will develop the terminal to make it capable of receiving a 10,000 tonne ship, by

creating a six-metre draft. ABG Group was the lone bidder for the project. The State government had floated separate tenders for two terminals at Azhikkal port – the cement terminal and the multipurpose terminal – based on the feasibility report prepared by Deloitte Touche Tohmatsu India Pvt Ltd. The multipurpose terminal did not attract any bidders.

SmartCity opens marketing pavilion The SmartCity pavilion which will house offices of the marketing, administrative and project management teams of SmartCity Kochi, was inaugurated by Chief

Minister Oommen Chandy on June 9. Speaking to the media after the director board meeting, held in the new office immediately after the inauguration, the Chief Minister said that there would be no more delays in the implementation of the project. Mr Abdullatif AlMulla, group chief executive officer, Tecom Investments which promotes the SmartCity Kochi project, said the first phase will be completed in 24 months. It would have a building spread over 3.5 lakh sq.ft. The project is now expected to cost `2,000 crore, an increase of `500 crore from the initial estimate.

Regulator-cum-bridge at Chamravattam The Chamravattom regulator-cumbridge project, the largest under the irrigation department, was dedicated to the nation by Chief Minister Oommen Chandy. The bridge across the Bharathapuzha is 978 m long, and 7.5 m wide. The regulator has 70 shutters and it would create a 13km long reservoir in the river.

The regulator has a height of 6 m above sea level. The total cost of the project was `154 crore, which included a grant of `95.13 crore from NABARD. The project will irrigate

9659 hectares of land in the Tirur and Ponnani taluks of the State. The bridge will also open up a new route between Kochi and Kozhikode that is shorter by 35 km than the existing route.

Government plans Media City in Kochi After SmartCity, another project modelled on Dubai is being planned for Kochi. Chief Minister Oom-

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men Chandy has said the government has commissioned a feasibility study of a media city, modelled on the Dubai Media City. The Kochi project will have modern facilities for media houses and institutions for journalism courses and training.

It will be customised to suit Kerala’s requirements. Mr KC Joseph, State Minister for Information and Rural Development said that the work on the project will begin this year.

Dubai Media City is a project of TECOM Investments, which is also developing the SmartCity project in Kochi.

Dubai Media City DPR for Kozhikode Monorail to be approved soon DMRC has submitted the detailed project report(DPR) of the Kozhikode Monorail project to the State government. The DPR suggests some changes from the earlier layout prepared by the consultant Wilbur Smith Associates – the major one being the proposal to connect the Kozhikode railway station to the monorail.

The project, aims to build a Monorail from Kozhikode Airport to Medical College - a distance of 35 kms - in three phases. The 13.5km long first phase from Medical College to Meenchanda is estimated to cost `1710 crore. It will have 16 stops en route. 1.3 lakh passengers are expected to use it on a daily basis. The project will be extended from Meenchantha to Ramanattukara in the second phase and further to the airport in the third phase.

Global tenders would be floated for the execution of the project, once the report is accepted.

TOURISM

Beautifully yours Kerala wants to broadbase, strengthen tourism operations

T

State as a tourist destination and at the same time preserve its environ-

The policy says the government will partner the industry to develop multi-experience packages and products to increase average length of stay of a foreign tourist from the current 16 days to 21 days

ment and culture. It wants tourism to be a significant contributor to the sustainable development of the State.

The new policy says the government will set up a fast-track clearance system for tourism projects with investment above `10 crore. It would formulate innovative marketing strategies in partnership with the private sector to develop Kerala as a global brand and will set up a task force for marketing Kerala as an all season destination. The policy also proposes setting up the Kerala Convention Promotion Bureau to market Photo courtesy: Marari Beach Resort

ourism is the posterboy of Kerala industry. An example of the success of the public-private partnership, the sector generates an annual income of approximately `20,000 crore, and is recording consistent growth over the last two decades. Foreign exchange earnings have also increased from `13 crore in 1986 to `4,221.99 crore in 2011.

Buoyed by the experience, the State government has formulated a new tourism policy, which seeks to further enhance the status of the

Responsible tourism which does not harm ecology is at the heart of the policy

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the State in the MICE (meetings, incentives, conferences and exhibitions) segment.

Kerala Tourism will also provide marketing assistance to new investors in the tourism sector. It will bear 25 per cent of the travel fare and cost of promotional materials subject to a maximum of `75,000 for international fairs and `50,000 for domestic fairs for one international fair and one domestic fair in a year, for the first three years. Tour operators, home-stays, serviced villas, ayurveda centres, new accommodation units of less than 30 rooms located in Kasaragod, Kannur, Wayanad, Kozhikode, Malappuram and Palakkad districts, and new houseboat operators in backwaters other than Vembanad Lake will be eligible for the assistance.

Development of infrastructure at tourism destinations will be brought under a Cabinet Committee on Tourism, chaired by the Chief Minister. A Task Force on Infrastructure Development, with the Minister for Tourism as the chairman, consisting of members of the tourism industry will also be formed. The policy also proposes to launch a new campaign – Kerala Waste Free Destination (KWFD) – with the active participation of local bodies, NGOs and Self Help Groups.

The policy aims to attract 30 lakh foreign and 1.8 crore domestic tourists to the State by 2021. Considering the recessionary trends that exist in major foreign markets, the policy proposes to give equal importance to domestic and international markets.

The emphasis is not just on increasing the number of tourists; it is also on enticing them to stay longer. The tourism department, according to the policy, will partner with the industry to develop multi-experience packages and products to increase average length of stay of a foreign tourist from the current 16 days to 21 days.

This will be made possible by developing new destinations, tourism products, tourism marketing strategies, HR and tourism research.

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Highlights • • • • • • •

Fast-track clearance for projects with investment above `10 crore Task forces for infrastructure, marketing Kerala Waste Free Destination campaign Better local visitor experience Incentives for new destinations Stress on responsible tourism Developing human resource

A key element of the policy is ensuring a world class local visitor experience. Provision of basic amenities in all destinations, constant improvement of services in hotels, restaurants and visitor points, upgradation of visitor facilities in places of interest and overall improvement in upkeep and maintenance of local attractions at destinations form part of the initiative in this direction.

Sustainability While development of tourism destinations remains a key element in the policy, the government also wants to ensure that tourism does not affect the State’s ecology. Approvals from the Department of Tourism will be made mandatory for interventions at vulnerable tourism areas and also for obtaining licenses for homestays, serviced villas, houseboats and Ayurveda centres.

Steps will also be taken to disperse the houseboat operations that are currently concentrated in the Vembanad Lake. They include creation of infrastructure facilities such as jetties, parking bays and boarding

A new ‘Kerala Waste Free Destination (KWFD) campaign with the active participation of local bodies, NGOs and self help groups is on the anvil

points in new areas. There will be special incentives also.

Responsible Tourism A responsible tourism task force is also envisaged in the policy. It will replicate experiences from destinations such as Kovalam, Kumarakom, Thekkady and Wayanad, elsewhere in the State. A new classification scheme – Responsible Tourism (RT) Classification – based on the principles of Global Sustainable Tourism Criteria will be devised for the tourism service providers. The existing investment subsidy schemes will be withdrawn and 15 per cent of the total investment, subject to a maximum of `20 lakh, will be provided for projects classified under Responsible Tourism. In addition, such units will get electricity at industrial tariff for the first five years.

The policy plans promotion of local art forms to benefit local communities. Souvenir trade which helps improve the local economy and acts as a word-of-mouth publicity material for the State will be encouraged.

HR Development The tourism sectors employs around 12 lakh people in the State. It is estimated that requirement of human resources in tourism industry is around 2 lakh per annum, while the supply is only 12,000. The department is planning a number of steps to bridge this gap, starting from creating awareness among the public on the opportunities available in the sector. The policy plans steps to ensure the quality of education by standardising the curriculum, faculty qualification and education delivery.

The government will develop the Kerala Institute of Tourism & Travel Studies, Thiruvanathapuram, as an apex institute in HR development for tourism. It will take a lead role in preparing curriculum and designing courses and offer technical support for offering tourism courses of different levels for various institutes including arts & science colleges, vocational higher secondary schools and industrial training institutes.

AGRICULTURE

The nutmeg maze An income of `20 lakhs a hectare. That is what nutmeg offers today.

And farmers are flocking to the crop. But will the good times last?

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Aby Abraham GK

utmeg. It’s a spice with a history, and its share of mystery. Famed for its flavour, and medicinal properties, this two-inone spice – the fruit has two spices, the black coloured nut and the bright red coloured mace that covers it – found extensive use in European cuisine from medieval times. But the fat price that the Europeans paid for the spice, only tempted the Arab traders who supplied it to conceal its origin.

Then, in the fifteenth century, the Europeans too took to the seas. And along with America and India, they found the source of this precious spice too – the Banda islands of Indonesia - from where the plant was smuggled to other parts of the world. Wars ensued among the European powers for control over the islands and the lucrative trade in its goodies. The Dutch, who gained control of the islands in the 17th century, even conducted annual armed expeditions to destroy the trees planted elsewhere. The monopoly over the trade helped them artificially jack up prices and build a fortune then.

Current prices of nutmeg are promising farmers just that - a fortune. The average price of nut-

The average price of nutmeg with shell increased three times in the last three years. An acre can hold 60 trees, each one yielding nuts worth ` 7,500 at the current price

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meg with shell increased three times from `113.42 in 2007-08 to `348.18 last fiscal. Mace which fetched `398.86 on an average in 2007-08 is today priced at `1190.

Says Mr Jose Mathew, a nutmeg farmer in Thodupuzha, who cultivates 500 nutmeg trees in eight acres, “On an average, a mature tree yields 15-18 kg of nuts a year, fetching around `7,500. Mace also earns a similar amount. An acre can hold 60 trees, which makes the total earning `9 lakh. The cost of cultivation is around `1 lakh, which means a net income of `8 lakh per acre.”

Enthused by the price, farmers are turning to the crop in huge numbers. The area under nutmeg cultivation in the country went up to 16,400 hectares in 2008-09 from 11,270 hectares in 2005-06. The figures would be higher as most of the price rise, and hence intensive planting, happened in the last three years.

But will the price hold? After all, the sweet smell of another spice – vanilla – which promised huge returns, only to deceive, still lingers in the air.

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utmeg is a spice that Kerala isn’t famous for, despite it being a major producer. The high levels of aflatoxin in the produce makes it unwelcome in the premium markets of Europe. For them Grenada, a small Carribean island of 1 lakh people, is the preferred source, followed by Indonesia, the largest producer in the world. These two countries supplied the major share of exported nutmegs in the world, estimated at 12,000 tonnes, till recently.

As a result of the two hurricanes in 2004 and 2005, production in the island nation plummeted. Exports decreased from 2,297 tonnes in 2002, to 1,066 tonnes in 2006 and to just 200 tonnes in 2009. It is unlikely to recapture the past as the emergence of tourism as a major economic activity has lured people away from the long-gestation crop.

At the same time, demand for the product went on increasing in the major markets – US, Europe and South America. In India too, 18

Nutmeg and mace are currently among the most expensive spices, and hence many buyers either substitute it with other spices or decrease its share in their recipes.

Substitution by synthetic products is another threat domestic demand is rising, thanks to its growing use in indigenous medicines/drugs, cosmetics and in various food products. The changing lifestyles and food habits are driving the demand for nutmeg in the country that consumes 13,000 - 15,000 tonnes annually. The production, meanwhile, is 12,000 tonnes a year and India currently has to import the spice to meet the demand.

But high prices have their risks, too. Nutmeg and mace are currently among the most expensive spices, and hence many buyers either substitute it with other spices or decrease its share in their recipes. Worse still is the possibility of substituting natural nutmeg and mace with a synthetic product as has happened with vanilla.

Will the prices last?

The high prices have farmers smiling, but how long will it last? Mr Mathew for one doesn’t expect it to last long. He is of the view that an income of `4 lakh per acre would be reasonable. “Nutmeg is a long gestation crop. Even though some varieties of the tree start flowering in the third year, the expected peak yield is between 25-50 years,” he adds.

Hence the expansion in cropping area has not yet reflected in the production figures.

The story is the same in Grenada too. The high prices have attracted people back to the crop. Farms that were neglected are now being revived. The country is planning to grow the production back to the pre-hurricane level of 2,000 tonnes by 2018.

The spread of cultivation raises the spectre of over production. It has not been long since Kerala farmers burnt their fingers with vanilla. But unlike vanilla, the long-gestation nutmeg poses higher risk. New farmers could face depressed prices when their trees start yielding after a long wait. Says Mr Kuriakose Vinay Thomas, managing partner of Pepper India Corporation, a major processer and exporter of nutmeg: “It would be a disaster if we do not take steps to manage the situation.”

Mr Jose Mathew emphasises selecting the right variety of nutmeg for planting. “Nutmeg cultivation is labour intensive and if the size of the nuts and mace is bigger, one could save a lot on labour,” he says. He has developed a variety–Kochukudy – that yields around 2000 fruits in the eighth year. In this variety, 70 nuts make up a kilo. Mr Mathew was conferred the Plant Genome Saviour award by the Protection of Plant Varieties and Farmers’ Rights Authority, India for conserving the variety.

The State has to capture new markets in line with the increasing production that would start coming into the market in a few years, if nutmeg farming is to remain sustainable. Short supply in the world markets has led to an increase in exports from the country. Indian exports of nutmeg and mace soared to 2,900 tonnes valued at `187.56 crore in April – December 2011, against 1,365 tonnes valued at `60.43 crore in the same period of the previous year. Exports to Europe showed a declining trend in the period, though.

The storms that lashed Grenada had thrown open the doors of the European market to nutmeg from Kerala. But complaints about the quality have the Spices Board making testing for shipments mandatory. The high level of highly toxic aflatoxin, which is the excreta of the moulds on the covering, is responsible for this situation. Increasing the quality of the produce, therefore, is the only option available to players in

Nutmeg in Kerala Kerala today accounts for more than 90 per cent of the total production of nutmeg. Nutmeg cultivation in Kerala is concentrated in the Thrissur, Ernakulam and Kottayam districts. Much like for rubber, the climatic conditions of Kerala suit nutmeg. The tree originally from Indonesia, needs warm, humid conditions and abundant rainfall – 150 cm and more. It thrives on clay loam, sandy loam and red laterite soils.

It cannot withstand heat and needs the cover of shady trees.

This makes it an ideal intercrop in coconut, clove, coffee or arecanut plantations. It is difficult to calculate the area under nutmeg cultivation in the State, as it is grown in homesteads and as an intercrop. It is estimated that 14921 hectares in the State came under nutmeg cultivation in 2007-08, yielding 11217 tonnes.

Crop loss in Grenada, where US and Europe shop for nutmeg, is the main reason for the spurt in prices the State, says Mr Thomas.

The high level of humidity in the State encourages the formation of moulds. The problem is complicated by the rains. “Harvesting of nutmeg in Kerala coincides with the rains. Hence drying the product is a challenge and the chance of mould formation on the produce is high,” says Mr Mathew. The problem is compounded by the lack of proper drying facilities among small farmers who cultivate most of the crop.

Processing of nutmeg isn’t a simple job. “The nutmeg has to be dried under low temperature and low humidity conditions,” says Mr Thomas. If the temperature is higher, the butter inside the shell melts. A lesser temperature would result in moisture remaining in the produce – only 8-10 per cent moisture should be present in the dried produce – risking mould formation. Moreover, nutmeg is a hygroscopic product – it absorbs moisture from the atmosphere. So the dried produce has to be stored in vacuum tight containers.

The solution, according to Mr Thomas, is to make centralised facilities for processing nutmeg. Only then can the product quality be ensured. With this aim in mind, his

company has started procuring nutmeg from the farmers. “We make sure that the produce reaches our factory within 24 hours of harvesting,” says Mr Thomas. The farmers are paid a price that is 30 per cent lesser than the market price to account for the shrinkage that occurs during drying.

But even then it is a tough call to convince farmers, says Mr Thomas.

The price of nutmeg is seasonal, with the price falling during the harvesting season and picking up during the summer. So farmers hold the product, rather than sell it immediately after harvesting.

Some farmers like Mr Mathew though are enthusiastic about the new system. “Even in Grenada, where the climate is much more favourable to ensure quality, processing of nutmeg is done in a centralised facility and not by the farmers,” says he. Mr Mathew believes that once reason for the steady prices this season was the procurement of raw nutmeg by the companies. “The price of dried nutmeg jumped from `250 to `300 in a day, once the company started procuring raw nutmeg,” says he. He is of the view that farmers should sell the produce if they get a decent profit. “Storing the produce causes losses in terms of weight and damage to the produce. If you want to speculate on price, there are many other options available,” says he.

A sound piece of advice. But with prices roaring, will anyone listen?

Presence of aflatoxin works against nutmegs from Kerala. Centralised processing of the product, which can ensure toxin-free product, is the way out as individual farmers cannot afford drying facilities, say Mr Jose Mathew, a prominent farmer

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When my information changes, I change my opinion.

What do you do, sir?

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

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Everybody knows that technology changes business.

Today, the change flows through the net.

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

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

Information changes

Be updated

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

21

BUSINESS CALLED LIFE

Photo: Sivaram V.

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Coconut farming is facing a real crisis now, with the prices crashing in recent times. However, it offers a livelihood to many people in the State. From the plucking of coconut to the marketing of coconut oil, the process by and large remains manual. In this picture, Anna Kutty, 75, dries coconut on a roadside at the coastal region of Chellanam, about 30 km from Kochi. She works from 8 in the morning to 5 in the evening, drying the raw coconut on bamboo mats. She earns `100 a day 23

cover story

Game changers

Most packages come with sessions in yoga and meditation and many visitors find it a point of attraction. A yoga session at Veda, the Ayurveda centre of the Raviz 24

When the models who landed in Kochi for the Kochi Fashion Week stepped on to an Ayuveda resort, it turned a new leaf in the history of the indigenous medical science. Ayurveda no more limits its reach to the villages and massage-seeking foreigners; it is serious about healthcare and also has a role in areas such as beauty care. And the service providers go the extra mile in serving their new-found admirers.

A P Jayadevan finds out the new trends in Ayurveda industry 25

“The doctor of the future will give no medication, but will interest his patients in the care of the human frame, diet and in the cause and prevention of disease.”

Thomas Alva Edison, inventor

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hat was a different set of visitors an Ayurveda resort would have ever received.

A group of beauty queens and models descended on Punarnava Bamboo Lagoon, Kochi, in April this year. The participants for the Kingfisher Ultra Cochin Fashion Week 2012, were there to attend a ‘beauty conclave’, as its organisers would call it. And to get a taste of Ayurveda.

At the conclave, the models, who included Miss India 2008 Shreya Kishore, Miss India Canada 2009 Tania Singh, and Ford Supermodel runner-up 2011 Anjum Fakeem, were made to ‘experience’ the Ayurvedic approach to beauty care.

“We explained to them that the way Ayurveda looks at beauty care is in total variance with what the market demands,” said Dr A M Anwar, chief physician, Punarnava Ayurvedic Hospital. “For us, beauty is a state

The models were so impressed with Ayurveda that they pledged their support to the propagation of the ancient Indian system of medicine. Many of them have booked for a session next summer

of well-being of the mind and the body.”

The models were so impressed with Ayurveda that they pledged their support to the propagation of the ancient Indian system of medicine, Dr Anwar said. “Many of them have booked with us for the next summer.”

The arrival of the models was not a one-of-the-kind event. There were reports that super model Naomi Campbell had her stint with Ayurveda in a Thiruvanathapuram hotel last year. Celebrities, businessmen and even political leaders openly declare their love for Ayurveda.

“I have been enjoying the mon-

soon Ayurvedic treatments for the last five years,” says Mr N Bhuvanendran, CEO, Hedge Equities, a Kochi-based financial intermediary.

“Now I consider it an energy booster for the whole year. My notion about Ayurveda was that it is for old people or for those with some chronic illness. But it all changed when I took a monsoon treatment five years back.

A 14-day treatment including massages, dhara, pizhichil and njavarakkizhi was so much rejuvenating. Yoga and meditation programs were also part of the treatment and I became a fan of yoga too.”

Mr Bhuvanendran says rejuvenating treatments with pure herbal medications, Yoga, meditation and a wonderful herbal diet can refresh one in a most amazing way. “It is my experience. I feel that its effect lasts throughout the year.”

Mr Sany Francis, managing director of Holy Faith Builders and Developers, a real estate company in Kochi, is another new convert to Ayurveda. “As seasons occur in nature, our bodies also go through changes,” says Mr Francis. “And for body, there should be a season for total cleansing. This is what I experi-

The ambience in which Ayurveda treatments are offered has changed. The Jiva Spa at Vivanta by Taj, Bekal 26

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Many busy people vouch for the discipline Ayurveda treatment provides to life.

Says Mr Sany Francis, a Kochi-based businessman: “With a dedicated 21 days treatment, we are getting trained to live more holistically, with a peaceful mind. It provides me the energy for the rest of the year” ence from Ayurvedic therapies. I am regularly having my monsoon therapies since 2007.”

Both the businessmen vouch for the discipline Ayurveda brings to their life, not only during the course of the treatment, but also for the rest of the year. “The most interesting part is the discipline it provides to life,” says Mr Francis. “With a dedicated 21 days treatment, we are getting trained to live more holistically, with a peaceful mind. It provides me the energy for the rest of the year. As a business man, this means much to me.”

Agrees Mr Bhuvanendran.

“Even after the treatment, you will have a tendency to stick on to those routines and diet, at least for some months. And that can influence the

whole year in a very positive way. I am practicing yoga every day which keeps me calm at my heart. After my first encounter with the power of herbs, I have suggested to many of my friends and colleagues to try it and I am happy that many are following Ayurveda today”.

The models too said they are convinced that Ayurveda is a complete medical system which also helps them take care of beauty protection.

They had a detailed interaction with the medical team and also with patients who came from 13 different countries.

So what has changed?

“Some years back, Ayurveda’s followers belonged to two distinct categories,” says Dr Shaji Varghese, chief physician of Pattarumadom Ayurvedic Clinic, Athani, Aluva.

“One, the die-hard believers, mostly old-timers, who sought relief from every disease through Ayurveda; and two, foreigners, who suddenly discovered the rejuvenative element of the Indian medical science and flocked here for massages. Today, it has changed. The new generation Indians have started learning the goodness of Ayurveda, while the foreigner is looking beyond massage and coming for treatment of chronic diseases. People now accept it as a total healthcare system rather than a package of wellness massages.”

“People choose things wisely and are now more aware about the healing power of herbs and avail them in ways different from the conventional

The models for the beauty conclave at the Punarnava Bamboo Lagoon, Kochi

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one,” says the doctor.

So what about the new generation Indians? Yes, they are quite at home with Ayurveda. In fact they count it to be a blessing.

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ow that Ayurveda has discovered a new following, is it reflected in the way Ayurveda is offered? Yes, it is. The old-fashioned facilities have given way to modern structures, which, at the same time, retain the simplicity that Ayurveda demands. And the players are finding it a worthwhile exercise to invest in such facilities. There are resorts, spas, specialty clinics and yoga-meditation centres that can be counted among the world’s best. They are set up in a salubrious environment, employ qualified doctors and boast of state-of-the-art infrastructure. They

The new generation Indians have started learning the goodness of Ayurveda, while the foreigner is looking beyond massage and coming for treatment of chronic diseases. People now accept it as a total healthcare system rather than a package of wellness massages

The treatments remain traditional, but the way it is being delivered has surely changed. offer authentic Ayurveda; only the atmosphere in which it is practised has changed from the conventional one.

“A very pleasant atmosphere makes it an experience, and not just a treatment procedure,” says Dr Vishnuraj Prakash, consultant physician of Veda Wellness Centre of Raviz Resorts, Kollam. 'Veda' offers Ayurvedic beauty and rejuvenation treatments, which also include slimming, stress management etc. “We have both curative as well as rejuvenative treatments,” said Mr Shinoj Joseph, sales manager, Raviz. “Our effort is to provide the guests with an authentic feel of the ancient science in a most modern environment.”

Most centres are generally equipped with exhaustive facilities. Cleanliness and hygiene are the bywords. There are tailor-made programmes as well as general ones. “‘Wellness’ is of prime concern.

Many of today’s clients are well aware about Ayurvedic treatments and many have rich experience on it, so they may ask for a shirodhara, or an abhyanga or even panchakarma.

Rather than just providing what they ask, we provide what is best for them after a detailed consultation,” said Dr Vishnu.

“Strict adherence to the tradition is today’s benchmark. For example, there are time restraints for administering certain treatments, and we do not violate them even if the client asks for it. A doctor can convince them in this regard. When they understand its benefits, indications and contra-indications, they happily ac-

Most service providers try and stick to the traditional regimen of Ayurveda.

A guest may be staying for just three or four days, and would still ask for an Ayurveda experience. The packages are most often customised as per the requirements and body conditions of the guest cept our suggestions,” said the doctor. “Three months back, a group of 57 persons from Middle East visited Raviz for a short stay. We have clients from Europe, US, and even from South Africa,” he added.

“There are limitations in a resort,” admits Dr Vishnu. “A guest may be staying for just three or four days, and would still ask for an Ayurveda experience. We choose one carefully so that he comes back for a thorough, complete programme.” There are packages, but most often that are customised as per the requirements and body conditions of the guest, he said.

The Taj group runs its specialty Ayurveda spa under the brand ‘Jiva’.

“We provide traditional and unique treatments rooted in the ancient wellness heritage of India,” said Dr Reji Raj, assistant spa manager, Jiva Spa of Vivanta by Taj, Kochi.

“Here we offer a host of rejuvenation options with the full range of

Jiva Signature treatments, apart from dedicated Ayurvedic consultation and treatment suites,” he added.

“We use only pure Indian herbs, aromatherapy oils and all-natural creams. Along with the rejuvenating massages, wraps and scrubs, there’s yoga and meditation as well,” said the doctor.

“Here we have one physician and 10 therapists. We have guests from all over the world. Apart from foreign tourists, we have clients from Kochi who regularly spend weekends here to enjoy our spa therapies. Some of them are businessmen, some are corporate executives, and some are from IT field,” he said.

The most sought after treatments are vishram and abhyanga, which provide relaxation and rejuvenation.

“Jiva spa at Taj Bekal is an exclusive Ayurvedic destination spa,” said Mr Prakash R, spa manager at Vivanta by Taj, Bekal. The spa complex is housed across 2.5 acres and flows with the unique architectural styling of the resort. All the treatment rooms have their own private courtyards against a setting of serene water gardens and lush tropical landscaping.

The spas are equipped with single and double treatment suites, beauty treatment rooms, meditation and yoga pavilions, relaxation pools and fully-equipped gyms. Ramada resort, Kochi, has created a truly international spa in which various Ayurvedic treatments are offered.

“We have clients who come back to avail Ayurvedic treatments alone,” said Mr K Suresh Kumar, general 29

My notion about Ayurveda was that it is for old people or for those with some chronic illness.

But it all changed when I took a monsoon treatment five years back, says N Bhuvanendran, CEO, Hedge Equities

manager.

Many people from abroad come to Kerala seeking the ‘miracles’ Ayurveda performs. According to Dr Anvar of Punarnava, more than 450 people from abroad came for treatment in his hospital last year.

While half of them came from the Middle Eastern countries, South Africans of Indian origin have become the latest votaries. “Last year there were 16 people from Slovenia taking treatment here,” he said.

The rush to Ayurveda is because of a number of reasons. Today, the world witnesses a tendency among people to look positively at alternative systems, and make a return to it. They are also increasingly becoming mindful of the virtues of alternative and herbal medicine.

Very little side-effects, comprehensive but simple treatment methods, ability to offer cure for chronic diseases…there are many reasons why the world looks at these systems.

And the rise of India as an economic power has kindled people’s interest in all that is Indian, including Ayurveda.

Kerala Ayurveda, which uses mostly medicines of herbal origin compared with the mineral-rich variety practiced in north India, has its own advantages. Over time Kerala has developed its own treatment protocols and formulations, which The treatment room at Ramada

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are very effective and simple. Some of them are so Kerala-specific that they cannot be practiced anywhere else. “For example, for an elakkizhi we use fresh leaves,” says Dr Anvar.

“Several such formulations demand fresh preparations which are next to impossible in a foreign land. There are several protocols which are tied to the practices in Kerala, which one would not find anywhere else.”

The availability of highly-skilled and trained professionals and the active presence of traditional vaidyas who inherit sound knowledge of the system through generations have together contributed to the authenticity of Kerala’s Ayurveda. Professionally trained doctors and Ayurveda hospitals they run have also helped the acceptability of Ayurveda.

Kerala’s gifted climate, its geographical position on Western Ghats and lush greeneries and forests with medicinal plants are conducive for the successful practice of Ayurveda.

Many hold the unique monsoon season the best to administer rejuvenation therapies.

Ayurveda has effective management systems for several diseases such as rheumatoid arthritis, neuromuscular diseases, skin diseases such as psoriasis, life style diseases such as obesity, diabetes and infertility management. “For certain diseases such as rheumatoid arthritis and psoriasis, a total cure is not possible but a patient who adheres by the conditions can live a normal, zero-symptom life,” said Dr Varghese of Pattarumadom.

Globally, herbal and alternative medicines are estimated to be a $100 billion industry, of which the Chinese systems command 85 per cent share. Ayurveda’s share is less than a per cent; Indian Ayurveda industry is about `4,000 crore. Kerala hosts about 1200 companies offering Ayurveda products and services, which together earn less than `500 crore a year.

With the service providers changing the game, the industry can surely look forward to some healthier numbers.

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ENTERTAINMENT

Costly superstars are no more a mandatory presence for box-office success in Malayalam cinema. A poster of Traffic, which started the trend

A twist in the tale Satellite rights ensure that small and beautiful films are also commercially viable in Malayalam

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Vijay George

he relationship between the film industry and the television has come the full circle in Kerala, with the latter underwriting the success of the former now. It started in an acrimonious tone in the nineties with the film industry accusing the nascent small screen of luring its audience away, threatening its existence. One-and-a-half decades later, satellite rights — the technical term for the money TV channels offer to buy the films — are funding a new movement in the film industry.

A movement which is so critical to its survival.

The supporting role of the mini screen was not conceived in a day; in fact, it was developed over a period of time. Not too long ago, it was a

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mix of all: the superstars commanded a premium, while the lesser saleable ones, too, existed, coming out with their own offerings off and on.

The offbeat filmmakers felt exasperated by the commercial elements in the mainstream entertainers, which ensured that their films rarely had the viewers. Even shoddily created slapstick comedies, remakes aimed

Director Rajesh Pillai’s Traffic, which had no real stars but a brand new pattern and an engaging script, paved the way for the emergence of the new wave

mainly at titillation and a few ones that were made as if with no real purpose came to the theatres at regular intervals.

And then came director Rajesh Pillai’s Traffic in 2011, which had no real stars but a brand new pattern and an engaging script. This film perhaps paved the way for the emergence of the new wave.

Quite a number of films followed suit. Some of them were well made while the rest ended up being half-baked. Aashiq Abu’s Salt N’ Pepper and 22 Female Kottayam, Sameer Thahir’s Chappa Kurishu, V K Prakash’ Beautiful, Srinath Rajendran’s Second Show and Arun Kumar Aravind’s Ee Adutha Kaalathu are the notable ones in this category.

The acceptance these new generation movies got was an eye-opener

not just for the viewers but also for the seasoned ones in the business.

They were all literally going around for the ‘dates’ of the saleable stars to announce their projects until then.

The superstars called the shots as their films ensured fascinating satellite rights, apart from a reasonable run in the theatres.

The scenario can be explained like this. The stars get paid anything between `40 lakhs to `1 crore or more for a film. If the total budget of the film can be restricted to `3 to 5 crore, it can well earn the whole amount from the satellite rights and also from a few other sources like video and remake rights itself. The distributors accepted the films and the theatre owners were too happy to show them at their centres.

The satellite rights are generally decided by the popularity of the stars in it and the number of well-known actors in the cast. The logic is quite simple. If you have more known faces, chances are that the viewers will sit through the film earning attractive returns as ad revenues when the films are aired on TV. This obviously meant that films with lesser-known actors often got relegated in the race.

The new generation movies brought a significant difference to these concepts. Traffic, made at a limited budget, had at its helm of affairs a director who made a rather disastrous entry some years back, which made him jobless since then. But still it started a trend, which is deciding the fate of Malayalam film industry right now. The presence of stars became less important and the search for hard-hitting and whacky stories has been on since then. Though there have been only a couple of really good experiments even among the new wave label, the impact in general has been tremendous.

The mighty stars got a taste of the music as their badly made films received poor initials, while films with no real big names were being lapped up by the viewers with great fanfare.

The advantages are many for the film industry. Until now, stories were often created by filmmakers

to suit the stars. Now, the situation has changed and though many of the directors plagiarise movies made elsewhere, there is a situation where the crowds will come and watch the movies which have something fresh in store.

The trend has also resulted in the return of the director to the wheel.

They no more need to wait for the dates of a saleable star; instead, can go ahead and decide their own cast.

The trend, which promises an assured recoup of the production cost and even a decent return on investment even before the release of films has so energised the young and talented directors that some have launched their own production houses. They include Amal Neerad, Lal Jose, Ashique Abu and Ranjith Shankar.

Director Aashiq Abu feels that “the trend could have been started with Ranjith’s Kaiyoppu which was made with a shoestring budget, though it had such a big star like Mammootty in it.”

But a few from the fraternity are quick to oppose this theory saying that the film was actually the product of an intelligent strategy to make the project profitable, from the satellite revenues. Still, the film stated that at times, small could be beautiful as well!

The emergence of the new trend in Malayalam is in tandem with what is happening in the various regional language films and of course, in Bollywood. Filmmakers like Ram Gopal Varma, Anurag Kashyap, Dibakar Bannerjee and Vikramaditya Motwane among many others have made

incredibly good films in Bollywood during recent years, with virtually no stars but with superb patterns and sensational scripts.

Fabulous films have been coming out from Tamil and even from hitherto neglected territories like Marathi and Bhojpuri. Whether the Malayalam film industry is matching up with the standards set by these films is something that the industrywatchers are keenly analyzing now.

“It’s heartening that new thoughts and experiments are getting appreciated these days. But the question is, are we moving in the right direction with the proper mindset to call it a trend?” asks award winning filmmaker Lenin Rajendran.

The fact that the whole industry is now gearing up to make ‘new generation’ films and are coming up with not so great results, raises an alarm in the minds of many.

With virtually everyone, including many of the veteran directors who have all along preferred to tread the safer path of catering to conventional theories to make hit films, quick to jump into this new style, how long will this liking for the new generation movies last?

It’s often true that Malayalis are quick to follow a trend. Well, it is the easiest thing to do, but the risk is that after a while things can become jaded big time. As one puts it beautifully, “let too much Traffic not end up in a road block.”

But then, that’s the way movies work. This new trend will be forgotten as a brand new one emerges. And as they say, the show will go on, forever!

The new trend has several directors including Aashiq Abu launch their own production houses

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Swimming with the tide Social media offers many benefits to businesses, but tapping it effectively requires some skill

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Mr S R Nair

ocial networks are constantly evolving and they provide enthusiastic usage to millions of online users. Today, everyone has a use of the Social network. It could vary from individual to individual. In its evolution, Social media has grown beyond adding friends and sharing statuses. Now organizations and professionals are getting involved in it to boost their business. Whether it is small business or large, the adoption of Social media is just moving with the times because of the business benefit it has to offer. Businesses now use it to get new customers, increase awareness and to stay connected.

Clearly speaking, there are five major Social media uses for businesses, viz: 1) for creating brand awareness, 2) as an online reputation management tool, 3) for recruiting purposes, 4) to learn about new technologies and competitors, and 5) as a lead generation tool to tap potential customers.

Many companies have made excellent use of Social media to establish themselves. If you are selling products/services or just publishing content for advertisement revenue, Social media marketing is an effective method that would make you profitable over time.

It is important to know how to effectively tap the power of Social media for business growth. So, how 34

can social media help your business? • Recommendation Rather than buying from a company that is faceless, it is natural that we would prefer to go by some recommendation. We understand that influencers play a vital role in the buying process.

One way you can reach your audience is with Social Media. Once you are popular and trusted there, your brand/product/service will automatically be suggested to other connected links. So it is not only about pushing your message, but also putting forward a positive image of your brand/product/service. Social Media will help you build trust and value thereby attracting the buyers. • Creating Relationship Building relationship is paramount for enhancing business and today online media helps you to build up relationships that can be the most ef-

fective way towards successful business. Just look at the bloggers who are making the best use of it by the RSS feed reader, where one can read the post as soon as published on the blog they admire, which can further be commented on. Through Social media - especially Twitter and Facebook, you can have direct conversation with many bloggers and audiences to shape your relations further.

This definitely proves the power of social networking for business. • Cost Effective Carefully planned Social media marketing strategy could certainly replace (either partially or fully) traditional advertising. And this is achieved at a fraction of the cost of advertising through the traditional media. Beyond doubt, social media marketing, which tends to have lower costs than other forms of marketing, could be cost effective for those

who need to get customers spreading and sharing messages.

• Direct Conversation Conversation is the most important part in any kind of business and social media is a platform that lets you to have direct conversation with your customers. Firstly, it can help you provide the products and services they desire and secondly you get their feedback and ideas to improve further. And since social media is more demographic, marketers can get new target audiences, or new set of people to do business with.

• Business Links Social Media helps bring high traffic to your site. These are of two kinds; one is primary traffic where you get direct visitors from social networking sites and then the secondary traffic, which is indirect referral traffic from websites which are linked to SM sites. Becoming popular on top social bookmarking sites can boost your site traffic and bring large number of links.

• Brand Loyalty Social Media provides the quickest way to enhance branding. It also makes it easy to track and monitor social media buzz around your brand.

Your brand gets higher exposure through online networking and that helps you gather thousands of prospects. Remember to take good care of your customers by adding online events and responding to your users; in order to build up good loyalty.

• Research Products & Services Social Media sites are the biggest market research facility available at your fingertip. Here you get to improve your offering by getting direct feedback from your consumers. You also get to understand the consumer’s needs and wants directly to make new products & services.

• Speed of Doing Business Social Network is quick. From time perspective, it is effective when compared to traditional marketing methods. However business owners need to do their homework and to make sure they are spending their time in the top social sites in their particular industry niche.

Social media is a platform that lets you to have direct conversation with your customers. Firstly, it can help you provide the products and services they desire and secondly you get their feedback and ideas to improve further • Peer Group Connect Social Media gives you a quick chance to get connected to your peers when required. For example, a web designer, developer and programmer can get help for any related issues just by a tweet message on twitter or status update on Facebook.

At the same time you can offer help when required by your peers. While it might take time to get connected to people on other sources, social media works very fast.

• ROI It goes without saying that if you focus on your customers and add value to their lives, you will surely attract followers. They will soon become your fan and start trusting your brand, which in turn gets you more leads and good business thereafter.

Social Media Do’s & Don’ts A. Do Not Sell, Engage The most popular brands in social media tend to post less about their products or services and more about things that help their customers get to know the people and personality of a company. Their goal is less about “selling” and more “engaging” — and, as a result, through such engagement people feel more comfortable doing business with those companies.

B. Move from Traditional Large Campaigns to Online Small Acts With sites like Facebook and Twitter, we all essentially have our own broadcasting network, and businesses are beginning to realize this rather than spending millions of dollars on traditional advertisement

campaigns. Small acts can be more valuable because people will inevitably share such experiences through the social web. In the past, if we had a very bad or very good experience with a company, it could take days or weeks to tell all of our friends and relatives about it. Today, in a matter of minutes, we can let all our friends on Facebook or followers on Twitter know about what happened. When every customer experience can be easily and widely broadcast, small issues become super important C. Be Yourself; Don’t Try to Control Your Image Once you look at the most popular companies in the social media, you’ll find that they give their employees freedom to be themselves in online spaces. The goal should no longer be to create a very controlled and polished image that everyone in a company tries to reinforce, but rather to give employees the means necessary to be human beings who can put a friendly face on the corporation.

When you discuss issues that matters in the day to day affairs of people and when we discuss values, you get more connected to people. You or your employees act as a person there, not as a company representative thereby deriving empathy from the audience which in long term, leads to relationship based business.

D. Don’t Play Difficult to Access To engage with customers, it is no longer enough to have an email address and customer service number on your websites. Today, people want to interact with and engage businesses via their chosen means of communication, whether that is Twitter, Facebook, discussion forums, or a feedback site. If someone is a constant user of Twitter, when he wants to communicate with a company, he will tend to look it up on Twitter first. Knowing that he can communicate with a company on the networks upon which he is most active makes him feel more comfortable doing business with the company. (to be continued) 35

personal finance

The equity link The Union Budget 2012, has retained the deduction available for investments made in Equity Linked Savings Schemes (ELSS) for one more year

E

quity Linked Savings Schemes are specified mutual fund schemes that let you save tax. The investments in ELSS 36

up to `1 lakh are eligible for tax deduction under Section 80C of the Income Tax Act. The fund managers invest the funds that your provide in

shares of companies. If the price of the shares of the companies go up, the Net Asset Value(NAV) of the scheme will also go up and the in-

vestment will be in profit.

ELSS come in two options – dividend and growth. If you select the dividend option, the return will be provided in the form of dividend declared by the scheme from time to time. In case of growth option, capital appreciation will provide the returns. The investors also have the option of reinvesting the dividend that is declared in the same scheme.

Advantages of ELSS The main advantage of ELSS is that it gives tax payers the opportunity to get superior returns on their investment, and save tax at the same time. Mutual funds are managed by professional funds managers who are adept at picking stocks and tracking the market, and so the investors gain from their experience and skill. The scheme has a lock in period, which allows the fund managers to focus on the long term performance of the portfolio, rather than worry about the daily performance of the scheme.

The lock in period of three years is also smaller than that of other tax saving schemes. The returns from ELSS – both dividends and capital appreciation – are tax free in the hands of the investor.

Risks As with any market linked instrument, ELSS also have some risk associated with it. There is no guarantee that the scheme will provide returns or even the capital that you had invested. The schemes also have a lock in period of three years during which you cannot sell the units, even if you are in dire need of funds or if you feel that the market is going down. In addition to the market risk, there is also the possibility that your scheme might perform badly, even though similar schemes made money.

it is vital that you select the right fund to invest in, if you are to make the most of your investment. Some factors to be considered while deciding on the scheme are, a. The track record of the fund. Select funds that have given a consistent performance in different market conditions b. The record of the fund manager – The performance of a fund depends to a large extent on the fund manager. Choose a scheme managed by an experienced fund manager with a good track record c. Expense ratio of the fund – The ratio of the expenses incurred in managing the fund to the assets is called the expense ratio. If the expense ratio is higher, the returns tend to be lower, as the expenses have to be met from the funds. d. The dividend history of the fund e. The scheme should have a Advantages of ELSS 1. Possibility of getting high, market linked returns 2. Investments managed by professional fund managers 3. Tax deduction up to `1 lakh under Section 80 C 4. Returns – dividend and capital gains – are tax free 5. Lowest lock in period among tax saving schemes

minimum scale, in terms of assets under management, so that the expenses are spread over a larger base.

Investing in ELSS Both open ended and closed ended ELSS are available in the market.

Open ended schemes are open for subscription throughout the year, while closed ended schemes can be subscribed to only in the specified period. Most of the schemes in the market today are open ended schemes. Investors can buy units of the scheme at the NAV on all business days. The Systematic Investment Plan option, which helps investors reduce the average cost of units held by them is also available for investors.

Investors can approach the fund house directly or through distributors to subscribe to the scheme. Investors might have to pay a fee if they invest in the scheme through a distributor.

As with any other mutual fund product, it is necessary to have a PAN to invest in an ELSS. If the investment is above `50,000, the investor will have to comply with the ‘Know Your Customer’ requirements. The completed application form along with the cheque and other documents have to be submitted before 3 pm to get the units allotted at the NAV of that day. Today registered stock brokers also facilitate investing in mutual fund schemes through the stock exchange mechanism.

Choosing an ELSS Most of the mutual fund houses in the country offer ELSSs. The returns from these are uncertain and depends a lot on the market conditions and the performance of the fund. So 37

A share of the loss Insurance companies have the opportunity to share much more than losses

Y

ou need insurance. We have been taught this for long.

Governments have been promoting it by making it mandatory in some cases as for vehicle insurance and giving incentives such as tax exemptions in other cases.

But is it really worth the trouble?

A share of the loss. Isn’t that what insurance really is?

Insurers are not charity institutions. They work for a profit. They pool the premium from all their customers. And the few unlucky ones among them who suffer the loss are compensated from the common pool. Your gain is the loss of others 38

The funny thing about the insurance is that you are betting that something bad will happen to you.

And the insurance company is betting that it won’t. In gambling, the reverse is true - you bet to win, not to lose. And so gambling is considered risky, and insuring, prudent

and vice-versa. In short it is a zero sum game. Much lesser than that when one considers the overhead costs involved – salaries, agent commissions, marketing expenses and the like. Not to mention the cut the government takes away as service tax.

All these are paid from the premiums you pay and only whatever little that remains goes to settle the claims. The steep drop in premiums that came about after insurance went online is a case in point. Everyone else except the policy holder benefits.

Gambling houses also follow the same principle. They pool money from many and prizes are paid out

of the pool. Obviously, for the show to go on the sum of the prize money paid out and the overheads involved in managing the show should be lesser than the amount collected.

This is achieved by setting the odds in favour of the house.

In insurance too. The companies fix the premium based on the probability of occurrence of the covered event, the sum assured, and their overheads. You and me don’t have that information, and depend on the competition between the insurers to get a good deal. So the odds will always be in favour of the insurers.

There is a major difference though between gambling and insurance. The funny thing about the insurance is that you are betting that something bad will happen to you.

And the insurance company is betting that it won’t. In gambling, the reverse is true - you bet to win, not to lose. And so gambling is considered risky, and insuring, prudent.

There are other problems too with insurance. It breeds irresponsibility. When you are covered by insurance, you tend not to worry about the amounts charged by your healthcare provider or the vehicle mechanic. After all, the money goes from the insurance company’s kitty! Chances are that people would opt for better services than that they would have otherwise availed, when covered by insurance. The service providers also understand this psychology and provide services that might not be required and also charge more - they know you couldn’t care less. Only the insurer will be worried about the inflated bills. An increase in pre-

If you are covered, then the service providers provide services that might not be required and also charge more - they know you couldn’t care less

mium soon follows. The buck stops nowhere and the cost of the service will spiral upwards. The insurers have been trying to check the trend by tying up with the service providers, but such efforts do have their limits.

Loss of a few, shared by many: that is what insurance does. This approach has an inherent problem. It is the reckless ones that have a higher chance of meeting such unfortunate incidents. Be it accidents, illness or death. So, in fact, insurance subsidises recklessness, at the cost of prudence. True, companies have policies such as no-claim-bonuses, and risk assessments that incentivise good behaviour. But even then if you do not meet an unfortunate event, all the premium that you pay is of no use to you.

Insurance frauds are also a not too uncommon an occurrence in our country. Making undue claims, often with the connivance of officials from the insurance firm and the police, isn’t that rare. People who make money from gambling should be plain lucky or they must have developed a technique to beat the system developed by the house. The same happens with insurance too. It is the ones who know how to work the system that benefit the most from insurance.

But don’t good people also face a risk, even though much lesser, than the reckless ones? Sure they do. And the best way to tackle that is to self insure yourself – make a sufficient corpus of funds without depending on insurance firms – to cover the risks that you face. Instead of a Mediclaim policy for `5 lakh, build a corpus of `5 lakh for your medical needs. Chances are that if you invest

Instead of a Mediclaim policy for `5 lakh, build a corpus of `5 lakh for your medical needs. Chances are that if you invest wisely, you could build up a tidy sum much easily than you think.

Insurance can of course be used as a stop gap arrangement in the interim

wisely, you could build up a tidy sum much easily than you think. Insurance can of course be used as a stop gap arrangement in the interim.

It is time insurance companies redeemed themselves. No-claim bonuses and risk assessments are good measures. But not enough. The industry needs to aim to prevent risk than cover it if it is to make a positive impact on the lives of people.

It should earn its profits not by just sharing losses, but by taking the initiative to prevent loss-making incidents. Insurance companies have a wealth of data about such incidents with them. They should use it to predict and prevent them. A stitch in time saves nine. Early detection of diseases could make treatment easier and cheaper for health insurance firms. Preventing accidents could lessen the burden of motor insurance firms. These could also reduce the death rate and thereby the claims that have to be settled by life insurance companies. Society would also gain from such measures, and insurance firms can claim their rightful share of it. Only then can the industry claim to be adding value to society.

After all there is much more to be shared than just losses.

39

Kerala statistics

Agriculture in Kerala Agriculture and allied activities contributed 11.54 per cent of the Kerala’s Gross State Domestic Product during 2009-10 Important crops in Kerala Thanks to its high density of population, land is in short supply in Kerala. Consequently, more and more of agricultural land is being used for other purposes. Acreage under most of the crops in Kerala declined during the last decade, rubber being the notable exception.

Sl. No

Crop

Area (Ha) 2001-02

2010-11

111189

72284

1

Paddy

322368

3

Coconut

905718

2 4 5 6 7 8 9

10 11

40

Tapioca Pepper

Cashew Rubber Ginger (Dry)

203956 89718

475039 10706

% change

Production (Tonnes) 2001-02

2010-11

% change

1

Paddy

703504

522738

-26

2

Tapioca

2455880

2408962 -2

3

Coconut 5479

5287

-4

4

Pepper

58240

45267

-22

5

Cashew

65867

34752

-47

770473

-15

6

Rubber

580350

770580

33

-51

7

Ginger (Dry)

40181

33197

-17

Banana

375903

483667

29

Arecanut

84681

99909

18

Coffee

66690

65650

-2

Tea

66090

57291

-13

172182 43848

534230 6088

-35 -16 12

-43

58671

15

Coffee

84795

84931

0

36899

Crop

-34

50871

Tea

Sl. No

213187

Banana

Arecanut 93193

Production has also fallen‌

99834 36965

7 0

8 9 10 11

‌But not as much as acreage, due to an increase in productivity Sl. No

Crop

Productivity (Tonnes/ha) 2001-02

2010-11

% change

1

Paddy

2.18

2.45

11

2

Tapioca

22.09

33.33

33.72

3

Coconut

0.01

0.01

11.84

4

Pepper

0.29

0.26

5

Cashew

0.73

6

Rubber

7

Ginger (Dry)

Income from major agricultural crops Income from rubber accounted for almost half of the total agricultural income in the State Sl. No

Crop

Income (lakhs)

2009-10 1

Paddy

91269

2

Tapioca

137830

3

Coconut

230133

-8.62

4

Pepper

54246

0.79

7.37

5

Cashew

15458

1.22

1.44

15.30

6

Rubber

851715

3.75

5.45

31.17

7

Ginger (Dry)

23454

8

Banana

77336

9

Arecanut

64855

10

Coffee

22993

11

Tea

26807

12

Mango

38173

8

Banana

7.39

8.24

10.36

9

Arecanut 0.91

1.00

9.20

10

Coffee

0.79

0.77

-1.75

11

Tea

1.79

1.55

-15.56

41

42

43

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