Vol.1 Issue 8 September 2011
RNI No. KERENG02297
Editor K J Jacob Principal Correspondents Aby Abraham G K A P Jayadevan Senior Correspondent Kuruvilla Chacko Sub-Editor Asha Jacob Design and Layout Renu Arun Website Suhas K Ranju Thomas 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.
When the gas flows
G
od must have conspired with humans to keep Kerala green. While several States which had lesser infrastructure and raw material sources went ahead with industrialisation, Kerala made little headway on that front. The improvement in social development could have asked for definite steps towards industrialisation to sustain itself but the opening of the West Asian job market acted as the valve. Hydel projects alone could almost meet its power requirements while other States had to set up coal or nuclear power projects. And the only industry which made sterling progress in the last two decades had a vested interest in keeping Kerala a pristine place. And now at a time when the State is called upon to explore new ways of development and meet its energy requirements, natural gas is set to arrive at its doorstep. The LNG terminal and gas pipeline project could be viewed as the best bet to keep Kerala as what it is environmentally today, while meeting its developmental needs. If properly planned, it will ensure that Kerala will write another glorious chapter of social advancement without harming the environment. Natural gas can replace the more costly – pricewise and environmentally - fuels and feedstock of several industrial units. We estimate that there are proposals for gas-run projects to produce more than 4000 MW power. This will meet the requirements of the State for a reasonable time. It will also help planners drop their pursuit of hydel projects which could harm the environment irrevocably. But the State must wake up to the possibilities the arrival of natural gas offers. There are issues of land acquisition for the pipeline project and pricing. The government must take the lead in assessing them with larger common good in mind. Last year, KSIDC held a natural gas conference in which all stakeholders—regulators, suppliers, potential customers and government officials attended. It cleared some air, but more needs to be done. The State should plan its industrial policy keeping natural gas as a key player. The cover story of this issue deals on these topics in an elaborate manner. We feel that planning the development of our industry and economy around natural gas will be the best way for sustaining the progress that we have made till now and meeting the demands of the future. We must work with the gods and GAIL to ensure that we remain green.
Contents COVER STORY
28 Get ready for the Gas Kerala’s tryst with natural gas is set to happen soon as Petronet LNG is commissioning its second LNG terminal in the country in Kochi. It will fuel Kerala’s industry and economy like none did before
ON
Team Paddy Farmers
18
An open mind for experimentation has the Pullazhi Kole Padasekhara Samithi in Thrissur bag the Nelkathir award
4
Contents
22 Back on track After delays, Kochi metro rail project picks up momentum Interview/Tom Jose, MD, Kochi Metro Rail Ltd Dreaming the metro Mr Tom Jose goes about his work systematically, putting in place the tools that are required to complete the Kochi metro rail project. “We have to dream the project 24 hours if we want to see it coming up,” he said.
38 Changing Roles Stock exchanges have much more to offer than trading in equity shares
36
It’s raining IT
Cloud computing is the economical way of consuming IT services
40 It’s portable now! If you are unhappy with your health insurer, you can move to another from Oct 1 42 Taming the wind Spare 15 minutes a day on meditation. Learn to control mind, sharpen its focus 44 Family planning V2.0 Where have all the children gone? 47 The brandmaster M E Meeran, founder of Eastern group, discovered the virtues of branding quite early 5
Vytilla Mobility Hub, the first planned multi-modal transport hub in Kerala, has become functional with the completion of the first phase of the project. It has parking bay for 65 buses, cafeteria and a toilet block. At present, KSRTC buses as well as long-distance private buses are operating from the mobility hub. With the work on the Kochi Metro set to begin soon with the demolition of the North over bridge, the hub
6
Text and photo: Kuruvilla Chacko
will play a crucial role in the traffic of the commercial capital of Kerala. The second phase of the project involves construction of an entry plaza, city bus terminal, a terminal building consisting of one basement floor, ground floor and first floor, three boat jetties, entry and exit, green area, bus clinic, idle parking and other amenities at a cost of `375 crore.
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The cover story on the Onam market boom was on the dot. I usually visit Kerala during the Onam season, and believe me the frenzied shopping activity seen here is reflective of the immense buying power of the Malayalee today. From white goods to jewellery to textiles to even dining out, Onam means a season of lavish spending. Even the marketers have a ball during this season as ads occupy primetime radio slots on every station. Neenu Suresh, Hyderabad As my wife and me read through the cover story on Onam shopping, we couldn’t but agree more. Like any Malayalee, even our shopping spend is maximized during Onam. With so many discounts and promotions all around the State, it’s hard to miss the temptation to splurge. Also kudos to the cover design, for effectively sending across the message of Onam and shopping. Raju Zachariah, Kottayam The write up on the Kochi International Fashion Week was totally engrossing. Having attended the event only the first day, it was good to see a round-up of the activities of the following day. Since the media in Kochi hadn’t really covered the event in detail, your article filled in the gaps for fashion enthusiasts like me. The fact that Storm fashion is planning to open a boutique store in Kochi made me go Ooh La La as well! Smita Babu, Kochi KSIDC needs a pat on its back for its initiatives in promoting industrial growth with investments worth 8
lise our funds and where. We have approached an NGO for the same now, and things are moving forward in a more organised way, leading to a better utilisation of our funds. The article was a timely help for people like us, as well as for corporates in the State who have bigger CSR plans. Reena Roy, Kochi (Ms Sangeetha Menon, CSR consultant, can be contacted on 09980541060 or sangeetha.mmenon@gmail.com).
`1 lakh crore waiting to descend on Kerala. Also notable is their contribution to improving CSR activities in the State. By promoting girl child education, they have indirectly conveyed a message for more corporate involvement in areas of health, education and housing in the State. K Ramachandran Nair, Thiruvananthapuram It is heartening to note that KSIDC, which is celebrating its golden jubilee, chose to address the needs of one of the most neglected segments of society, instead of splurging it on showy events. And the idea of picking the girl child was also commendable. I hope that more corporates will follow KSIDC's footsteps and sponsor education of the needy and deserving. Priya Nair, Kochi I’m an employee with an IT firm in Infopark, Kochi. Reaching out to society’s underprivileged has always been a heartfelt desire of mine. Recently I had come in touch with a few colleagues who shared a similar passion. We were though clueless on how to go about doing the same. Your article ‘The Golden Smiles’ provided us with the much required information on how to uti-
Finally, it’s a relief to know that Ayurveda in the State will be efficiently marketed and provided avenues for commercial growth (Rejuvenating Ayurveda, August issue). Hailing from Cherthala, Allepey, I have noticed that only the Arya Vaidya Sala is as renowned in the international market as it is in the domestic market. Most tourists flock to Sri Lanka and other neighbouring countries just because we have failed to capitalize on our strong point of providing authentic Ayurveda. Hope CARe Keralam helps promote enthusiastic and genuine entrepreneurs in this segment, who will wash away the negative picture that some Ayurvedic massage parlours in the state portray. K Subrahmanium, Cherthala The column 'How much gold does a man need' by Aby Abraham seriously set me thinking on the current gold purchase trends. While we all follow the gold rush quite blindly, the article offers the other side of the picture, reflecting the true meaning of the column. Wellresearched and beautifully written, the article will force those in the hunt for gold into thinking about the doomsday and the non-utility of gold in times of distress as nothing but an element, stored away in the house locker. Navin Thomas, Kochi
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9
I SAY!
Humility is the biggest qualification that a leader needs. The fact that the ministers sat down before others to attend classes shows their greatness IIM-K director Debashis Chatterjee after taking classes for Kerala ministers
Practices such as ‘Nokkukooli’ have brought a bad name to workers in Kerala though there is little industrial unrest in the State now. The government is determined to change the image of Kerala labour which is highly skilled and educated Shibu Baby John, Labour Minister, on the reforms the government plans to introduce in the labour sector A good group is not one that is flawless or that have never made any errors. A great group is one that learns from its mistakes and makes a comeback Anand Mahindra, vice-chairman & MD, M&M when asked if he regretted entering the car and two wheeler business
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One can bribe their way to make a $10 million business, but if you want to make a $1 billion business, there is no other way but to do business the right way N R Narayana Murthy, Infosys chief mentor, expressing concern over worsening corruption Tapping the rich to close the deficit is not class warfare. It’s math Barack Obama, US President, on his new tax proposal I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come Steve Jobs, Apple CEO, in his resignation letter
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AT A GLANCE
At 46 m, US poverty rate highest in 52 yrs As many as 15.1 per cent of US population, or one among six Americans, lives below poverty line. According to the US Census Bureau, the number rose to 46 million last year, the highest in 52 years, as the economy struggled to recover from the recession that began in December 2007. That marked a 0.8 per cent increase in poverty rate from 2009, when there were 43.6 million Americans living in poverty. The median income of working Americans also declined 2.3 percent to an annual $49,445. The US has long had one of the highest poverty rates in the developed world. Yahoo CEO Bartz fired over phone
Yahoo Inc chairman Mr Roy Bostock fired chief executive officer Ms Carol Bartz over the phone. “I am very sad to tell you that I’ve just been fired over the phone by Yahoo’s chairman of the board. It has been my pleasure to work with all of you and I wish you only the best going forward,” the outspoken CEO said in a two-sentence email to employees. Analysts said Bartz’s departure signalled the company had run out 12
of options after failing to dominate the advertising and content markets and handing over its search operations to Microsoft Corp. Yahoo is still one of the most popular destinations on the Internet but faces increasing competition from social networking service Facebook and from Google, which has a market value of $170 billion, 10 times more than Yahoo. After IBM, HP to exit PC business The market leader in PC business worldwide, Hewlett-Packard, has announced that it plans to exit from the business. The move shows the problems faced by PC makers in the US. The PC division generates the most revenues for HP, but it is also the least profitable division. Earlier, IBM had sold its PC business to the Chinese company Lenovo. Dell and Apple are the only remaining large PC makers in the US. HP is also exiting the tablet and mobile phone market, unable to deal with competition from rivals like Apple. But the company will continue to sell servers and other equipment to business customers. Moody’s cuts Japan’s rating Moody's Investor Service cut Japan’s rating by one notch to “Aa3” from “Aa2”. Burgeoning national debt and political instability were cited as reasons for the cut. Frequent change in gov-
ernments has affected the ability of the country to implement long term economic strategies according to the agency. The natural disasters that visited the country last March has aggravated the deflationary conditions, leading to the rating cut. China overtakes US as biggest PC market China became the world’s biggest consumer of PCs in the second quarter of 2011, showed market research by IDC. Manufacturers shipped 18.5 million PCs in China during the period, compared to 17.7 million in the US. US is still expected to maintain its lead for the whole year. But, IDC expects China to be on top in 2012, shipping 85.2 million PCs, compared to 76.6 million in the US. China's PC market is still growing while the US and European PC markets are contracting due to economic troubles and competition from smartphones and tablet computers. Google buys Motorola’s cellphone business Google is acquiring Motorola Mobility Holdings – the cell phone business that was earlier split from Motorola – for $12.5 billion, a 63 per cent premium to its market capitalisation. This is Google’s largest acquisition till date. The acquisition would make Google a full-fledged cell phone manufacturer as it already makes the
Android mobile operating system for smartphones. Android runs on the open platform and accounts for around 40 per cent of global smartphone sales. It is used by more than 39 manufacturers worldwide including Motorola Mobility Holdings. The move puts it in direct competition with iPhone manufaturer Apple. Subprime: US to sue erring banks
The legal fallout of the subprime lending crisis is starting to hit the big banks in the US. The US Federal Housing Finance Agency, which oversees the mortgage giants Fannie Mae and Freddie Mac, is suing a dozen banks including Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche bank, for billions of dollars in compensation. The agency accuses them of misrepresenting the quality of mortgage securities they sold at the height of the housing bubble. It argues that the banks failed to perform the due diligence required under the law. Also, 50 state attorney generals are in the final stages of negotiating a settlement that requires banks to pay at least $20 billion to reduce mortgages of homeowners facing foreclosure.
AT A GLANCE
India’s GDP to overtake Japan’s There is some good news for Indians amid a global gloom: India might become the world’s third largest economy in 2012 in terms of purchasing power parity (PPP). It will replace Japan, with US and China occupying the top two positions. As per 2010 figures, the Japanese economy was worth $4.31 trillion, and Indian $4.06 trillion. The tsunami and earthquakes have the Japanese economy set to contract while India’s economy will grow 7 per cent. Under the PPP method, a dollar should be able to buy the same amount of goods anywhere in the world and exchange rates should adjust accordingly. Premji’s dividend: `1,345 crore
Wipro promoter Mr Azim Premji took home `1,345 crore as dividend last year, overtaking Reliance Industries chairman Mr Mukesh Ambani’s `1,241 crore. Bajaj Auto chairman Mr Rajul Bajaj (`917 crore), Vedanta Group’s Anil Agarwal (`790.2 crore) and Keshub Mahindra (`312.2 crore) were the other top earners, according to a report in Economic Times. Infosys founders Mr N R Narayana Murthy and
Mr Nandan Nilekani got `139 crore each as dividend in 2010. `500 crore capital for new bank licence
As per the new RBI draft guidelines for issuing licenses to new banks in the private sector, entities in the private sector, owned and controlled by residents, with diversified ownership, sound credentials and integrity and having successful track record of at least 10 years will be eligible to promote banks. Groups having more than 10 per cent income or assets from real estate construction and/ or broking activities in the last three years will not be eligible. New banks will be set up only through a wholly owned Non-Operative Holding Company (NOHC) to be registered with RBI as a NBFC. The banks will have a minimum capital requirement of `500 crore. At least 25 per cent of its branches will have to be opened in unbanked rural centres. IT companies plan to recruit 2.5 lakh
IT majors have kickstarted their campus recruitment, aiming to recruit 2.5 lakh fresh engineers this year, up from the 2 lakh recruited
last year. Major companies like TCS, Cognizant and Wipro have already started visiting campuses and issuing offer letters. But the starting salaries for the recruits have remained stagnant at the last year levels of `3 lakh to `3.25 lakh a year. 4,03,000 Indian millionaires by 2015 There will be 2.82 million $ millionaires in Asia, by 2015, powered by the growth in India and China. China would account for half of these millionaires, while the number of millionaires in India would rise to 403,000 by 2015, with their wealth estimated at $2.46 trillion, according to a report of Julius Baer, a Swiss private bank. It says the total wealth of Asia’s millionaires would triple to $15.8 trillion in five years. 35 ‘small’ Indian cos on Forbes Asia list 35 Indian companies have made it to the Forbes Asia’s ‘Best Under a Billion’ list of 200 companies for the year 2011. The list is dominated by China and Hong Kong which together accounted for 65 companies. The list considered companies which had a turnover between $5 million and $1 billion and were publicly traded for at least one year. The Indian companies that made it to the list include SRF, Polyplex, Glodyne Technoserve, Opto Circuits and Educomp Solutions.
CCI slaps fine on DLF for abuse
Home buyers in the country who feel cheated by the strong arm tactics of builders have reason to rejoice. The Competition Commission of India has imposed a penalty of `630 crore on real-estate major DLF, for abusing its dominant position. It issued a ‘cease and desist’ order to prevent DLF from imposing unfair conditions on the buyers of its flats. The CCI order came on a complaint filed by a Belaire Owners' Association in Gurgaon on the delay in the execution of a project and the conditions that it felt adversely affected their rights. Big car or small, it’s diesel all along The sales of diesel cars have raced ahead of petrol cars since the price differential between petrol and diesel widened last May. The share of diesel cars in the overall compact car sales increased to 56 per cent in August, up from 51 per cent in June. Diesel cars accounted for just 39 per cent of compact cars sold in July last year. The change is more marked in the sedan segment with diesel versions accounting for nearly 64 per cent of the sales today compared to 28 per cent a year ago. Diesel is cheaper than petrol by more than 50 per cent. 13
AT A GLANCE
Projects to benefit land owners also
Even as the Central government is coming up with new norms for land acquisition, the State government has cleared the draft of a new land acquisition policy aimed at speeding up the development process. The highlight of the policy is the ‘transferrable development bonds’ that would be issued to people who do not want immediate cash for their land. The bonds can be encashed at a later date, and would enable landowners to benefit from the increase in land value once the area is developed. The draft policy also proposes to give landowners up to 2 per cent equity in the project and a job to one person from the family which loses land in the project. Land acquisition is one of the main reasons for the delay in executing projects in the State. Videocon to set up manufacturing unit
The Videocon group will 14
set up a state-of-the-art electronics manufacturing facility in the State at an investment of `200 crore. The announcement was made by Mr Rajkumar Dhoot, MD of Videocon Industries, at a function to mark the completion of 25 years of its operations in Kerala. The location of the facility will be decided soon. The facility would manufacture consumer electronics goods and is expected to provide employment to 1000 people. CSB to up FII limit, float NRI bonds
Catholic Syrian Bank is seeking shareholder approval to increase the foreign institutional investor limit in the company to 49 per cent. Currently FIIs hold 14.99 per cent in the bank. The bank needs funds to meet its capital adequacy requirements and is planning to raise capital by issuing preferential shares or through private placement. It has also got the RBI’s permission for floating NRI bonds. The issue size has been pegged at `150 crore. Catholic Syrian Bank is also proposing a comprehensive revision of its Articles of Association in order to support its growth plans. Dun & Bradstreet awards for SIB South Indian Bank has bagged two awards in the
Dun & Bradstreet– Polaris Software Banking Awards for 2010-11. The awards were for the Best Private Sector Bank in asset quality and priority sector lending. This is the second time the bank has received the award for asset quality. Singapore co to buy Kochi spices firm Singapore based agricommodities giant OLAM is set to acquire Vallabhdas Kanji (VKL), a Kochi-based spices business firm of the JV Mariwala Group. VKL is one of Asia’s leading processor of spices. It has processing plants in south east Asia and exports products to over 30 countries. The promoters had mandated an investment bank for a stake sale. Olam’s entry marks a consolidation in the fragmented Indian spices market. Earlier another global gaint McCormick had acquired 26 per cent stake in Eastern condiments. Kudumbashree Onam sales hit `15 crore
More than 40,000 Kudumbashree units sold products at 1165 Onam trade fairs in Kerala this year achieving sales of `15 crore an increase of
`1.5 crore from last year. The turnover of Kudumbashree units participating in Onam fairs have been increasing over the years: it was a mere `3.38 crore in 2008. Around 73,630 families from the poorer sections of society make a living through micro-enterprises under the Kudumbashree programme. Kerala is highest consumer of meat
Data with the animal husbandry department in Kerala show that people in the State consume 5,000 tonnes of meat daily, the highest in the country. The department officials estimate that a whopping 80 per cent of Keralites are nonvegetarian. Chicken is the most preferred meat in the State, accounting for 45 per cent of the meat consumption. But as is the case with other food stuff, Kerala imports most of its meat requirements, relying on the neighbouring States for the supply. Keralites spent `2,844 crore on chicken in 2009-10, of which `1,752 crore went to poultry farms outside the State.
PROJECT TRACKER government and a private partner. MARITIME UNIVERSITY
HIGH SPEED RAIL CORRIDOR
Company formed to implement project The high speed rail project in the State has got a shot in the arm with the formation of a new public limited company - Kerala High Speed Rail Corporation Ltd - to implement it. The company was formed on the basis of a report by Delhi Metro Rail Corporation, which had been entrusted with the pre-feasibility study. T Balakrishnan, Ad-
State offers 60 acres for full-fledged campus The Kerala government will provide 60 acres of land for setting up a fullfledged campus of the Indian Maritime University(IMU) in Kochi. The announcement was made at the foundation stone laying ceremony of the University's Kochi campus. Nearly 90 per cent of the global trade happens through water. To build professionals for the sector, the Parliament standing committee had recommended setting up the IMU headquartered at Chennai and with regional campuses at Mumbai, Vishakhapatnam, Kolkotha and Kochi, subject to availability of land. The shipping ministry has already allocated `25 crore for setting up the Kochi campus of IMU. The Kochi IMU campus is already offering courses in nautical sciences, ship repair and ship building, port and shipping management and marine engineering. Courses in maritime law and dredging are also being planned. VALLARPADAM ICTT
ditional Chief Secretary (Industry and Commerce), Alkesh Sharma, Managing Director, KSIDC, and T P Thomaskutty, Executive Director, KSIDC, are the first directors of the new company. The company will prepare the detailed feasibility report for the project and decide on the technology to be used. The 630-km network, extending from Thiruvanathapuram to Mangalore, is expected to cost `77,000 crore. The proposed network will have two parallel tracks in the standard guage system. It will be aligned independent of the existing railway network. A 13-metre wide stretch of land for the length of the State will be required for the project. The notification for acquiring the land for the project will be released soon. The project is to be implemented as a joint venture between the State
ICTT receives vessel from Tuticorin ICD The Vallarpadam ICTT has received the first consignment of 90 TEUs of export cargo from the Tuticorin Inland Container Depot (ICD). Congestion in the Tuticorin port is cited as the reason for the diversion of cargo. The ICTT is already linked to the Bangalore and Coimbatore ICDs. 3 trains carry containers from the Bangalore ICD to Vallarpadam every week. It is expected that ICDs
in Chennai and Hyderabad also will be linked to the ICTT soon. The ICTT now offers mainline services to Europe and this is attracting the export-import business to Kochi. SMART CITY
Centre grants SEZ status for 114 acres The Central government has granted SEZ status for the remaining 114 acres of the SmartCity project, Kochi. 132 acres of land had been granted the SEZ status in March
this year. The SmartCity project area is divided by a river flowing through it and hence it was not considered as a contiguous plot of land for granting SEZ status earlier. But now the whole project area of 246 acres has been approved as a single SEZ. The move is considered to be beneficial to the project which is set to take off soon. COACH FACTORY
Foundation stone to be laid on Oct 22 Union Railway Minister Dinesh Trivedi has announced that the foundation stone of the Kanjikode Rail Coach Factory will be laid on October 22. With this, the three decade long wait for the project is coming to an end. The decision was made at a meeting between the railway officials and the State delegation led by Chief Minister Oommen Chandy in Thiruvanathapuram. The State government had provided 431 acres of land free of cost to the Railways for the project. The coach factory is expected to make Palakkad a new industrial centre with a number of ancillary industries to provide spare parts being set up. The factory will provide direct employment to 3000 people and indirect employment to 5000 people. 15
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!
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AGRICULTURE
Team Paddy Farmers
Pullazhi is an example of the success of team work by spirited farmers, workers and officials
An open mind for experimentation has the Pullazhi Kole Padasekhara Samithi in Thrissur bag the Nelkathir award
T
Kuruvilla Chacko
hrissur may not be a district one usually counts among the paddy strongholds in the State. But while its more acknowledged cousin Kuttanad shines under the tag of ‘Rice bowl of Kerala’, and the neighbouring Palakkad district stands tall as Kerala’s highest producer of rice, the farmers of Pullazhi in Ayyanthole panchayat of Thrissur have taken the lead in displaying the merits of community farming, with their innovative and self-sustaining practices- elements of paddy farming hardly noticed elsewhere in the State. Recipient of the State govern-
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ment’s Nelkathir award for best group farming practices in 2009-10, the Pullazhi Kole Padasekhara Samithi has been recognised for its role in efficiently coordinating group farming activities over 900 acres of kole paddy fields—the single largest stretch of farmland in Thrissur district. The The Samithi developed farm roads, introduced harvesters and tillers and other mechanised farming equipment and promoted on-farm delivery of paddy
award carries a cash prize of `2 lakh, a citation and a gold medal. The Pulis of Pullazhi The farmers of Pullazhi have always been ahead of their counterparts in the State when it comes to implementing fresh ideas. They formed the Pullazhi Kole Padsekhara Samithi in 1961, to cater to the needs of the farmers. “The society was set up to handle the administrative affairs of the farming community and to ensure its welfare,” said Mr K Gopinathan, a farmer for 10 years and the president of the Pullazhi Kole Padasekhara Samithi. The Samithi though, did not con-
fine itself to sowing and harvesting; it took several initiatives that facilitated profitable farming. This included developing farm roads for easy access in the early 80’s, introducing mechanisation by utilising harvesters, tillers and other mechanised farming equipment in the early 2000s, and promoting on-farm delivery of paddy crop to mill owners in 2004. Such initiatives helped draw more people, including youth, into the profession of farming. While most other districts reported considerable drop in the number of people engaged in farming in the last decade, and when stretches of land were left fallow, the Samithi could sustain farming in the area. The number of farmers, in fact, has increased to 600 today, from 200 in the 60s.
H
aving zeroed in on the mundakan crop for its easy adaptability to the kole fields of the district, the society plans the farming calendar in such a way as to coincide with the retreat of the monsoons in October. Come August and the entire community gets together for an annual pre-farming celebration in nearby temples. The next step is to schedule all activities including irrigation, sowing and harvesting. Experts from the Kerala Agricultural University and other institutions are invited to conduct workshops on latest farm practices. The Samithi also gives loans up to `20,000 to individual farmers, irrespective of the size of the land holding. “Most people own around 5-15 acres,” said Mr Gopinathan. “Only half the loan amount is provided in cash. The remaining is transferred towards purchases of seeds, fertilisers and farm equipment. This way we en-
sure that the loan amount is utilised only for farming.” The society owns five 50 HP and two 20 HP motors which are operated for 20-25 days starting October, to drain the water off the field and clear the land for sowing; and later for irrigation purposes. Three technicians and four guards are employed for the smooth operation of the same. The seeds are procured from the Vegetable and Fruit Promotion Council Kerala (VFPCK), and the first round of sowing starts on the 6th day of draining. “Sowing is completed along the entire 900 acres of kole paddy field in 25 days. The guards and technicians work in shifts 24x7, to ensure that the farmers face no delay in sowing,” said Mr Gopinathan. For all this technical support, the farmers pay an annual fee of `600 to the society.
W
orking together has its advantages, as the farmers discovered two years ago, when army worms, or swarming caterpillars, attacked the farm lands immediately after the end of the sowing period. “We saw the crops disappearing in a flash, right before our eyes,” said Mr Gopinathan. “The shock could very well have turned into a loss, had we not collectively held on and tackled the menace.” The society, with the help of Mr K K Jayan, agriculture officer, Krishi Bhavan, Ayyanthole, Mr C R Ramesh, principal agricultural officer, and Mr PB Balachandran, director, Paddy Mission, swung into action and controlled the damage by spraying pesticide in the right measure in the entire area. “Later, we pumped in water and lost no time in draining the pesticides off the fields, and
Vegetables like spinach, cucumber, beans, okra and pumpkin were grown, and sold through the Horticulture Corporation. There is also a plan to start fish rearing on a large scale from 2012
Mr K Gopinathan with the Nelkkathir Award. “We attend seminars and hold discussions with farm officers from Kuttanad to improve our practices,” he said then sowed the seeds a second time,” said Mr Gopinathan. “In addition, we also made 10.5 acres of fallow land cultivable at a combined cost of `1.4 lakh. The human spirit of the farmers at the time of adversity was inspiring. There was a determination to make up for the loss of crop, even if it meant a drain on our resources.” The district farm office on its part provided `10,000 and five sprayers to the society at the end of the crop season. And the work paid off. The Samithi achieved a bumper crop in 2010 with a yield 50-70 times of what was sown. The farmlands like any other year managed to produce the minimum quantity of 25 quintals and a profit of `19,340 per acre of land. This achievement spurred the community into extending their farming calendar to maximise profits in a planned manner. It drafted a scheme to utilise the fields between the harvest month of March and the sowing month of October by cultivating vegetables on 50 acres of land. 19
Sowing is completed along the entire 900 acres of kole paddy field in 25 days. The guards and technicians work in shifts 24x7, to ensure that the farmers face no delay in sowing The Samithi provides loans up to `20,000 to individual farmers, irrespective of the size of the land holding “After the 2009 crop, we roped in the support of self-help groups - Kudumbashree and Janasree - and a number of youngsters who were interested in cultivating vegetables,” says Mr Gopinathan. The idea soon gathered momentum and at the start of the vegetable season, as many as 98 farmers implemented the scheme on an additional 50 acres, raising the total land under vegetable cultivation to 100 acres. Organic farming gained priority, and seeds were procured from the National Seeds Corporation at subsidised rates, with the society providing the essential farm equipment. Vegetables like spinach, cucumber, beans, okra and pumpkin were grown, and sold through the Horticulture Corporation. The scheme turned out to be an unexpected pot of fortune, providing returns close to 200 per cent with an average profit of `14,000 per acre and a net production of 330 tonnes. In effect, it meant an additional revenue of `12 lakh into the coffers of the Samithi. With the profits earned from paddy and vegetable cultivation, the society constructed a building of its own and a godown for storing farm essentials. It also bought a harvester for `23 lakh and created a fund of `15 20
lakh for setting up bunds and planting coconut trees around the farmlands. They even opened a ‘Neethi’ medical store to sell medicines at subsidised rates. The late retreat of monsoons in 2010 meant a shift in the start of the crop season from October to December that year, which resulted in the cancellation of the vegetable season in 2011. “We were not disappointed though; instead we have put in place a scheme for fish cultivation alongside vegetable farming in 2012,” said Mr Gopinathan. The society has already conducted research on its viability and has, on an experimental basis, tried rearing fish such as cutla and rohu, which has met with a fair amount of success. Further Experiments The farms of Pullazhi may be maintaining a steady growth pattern, but according to Mr Gopinathan, a move towards adopting organic farming on a large scale is the need of the hour. “We have begun the use of organic pesticides such as pseudomonas and tetrochad, and have implemented 100 per cent organic farming in 25 acres,” he said. Not content with procuring organic manure from outside, the society has proposed a plan to set up an animal farm to rear cattle and other livestock. “By rearing domestic cattle, we not only get another source of income, but can also use the animal refuse as organic manure for our crops.”
The society also plans to set up its own grinding mill soon. But despite all their experiments, what sets these farmers apart is a willingness to embrace positives from other paddy cultivating areas of Kerala as well. “The society has only the farmers’ interest at the core of its thinking,” said Mr Gopinathan. “For this very reason, we attend seminars and hold discussions with farm officers from Kuttanad region to improve our practices. From our discussions there, we have hit upon the idea of rearing ducks. This move will breathe life into the water resources, besides bringing in extra revenue.” Their hopes lie on the implementation of the proposed Thrissur-Ponnani agriculture package worth `580 crore, for the quick implementation of such schemes. Until that comes through, their passion for experimentation and channelising the best practices in a collective, organised manner will continue to script stories of success and self-sustenance. And hopefully add more medals, to their kitty.
The spirit of the farmers when their crop was attacked by army worms was inspiring. There was a determination to make up for the loss of one crop, even if it meant additional expenditure
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Back on track Kochi Metro project picks up momentum
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metro train starts on time, accelerates in no time, reaches designated stations in scheduled time and reaches its destination, also, on time. But by taking an unusually long time to get started, the Kochi Metro project acted quite unlike the trains it plans to run. Until recently. The 23 station, 26-km metro-line connecting Aluva to Thripunithura, one of the busiest routes in Kerala, 22
has been part of the thinking process of the State government for more than a decade. The Delhi Metro Rail Corporation, the pioneers of the metro concept in India and consultants to the project, had submitted a project report way back in 2005, but little had happened since. From doubts about the viability of the project to opposition to the route to questions about the funding pattern, the project had hit roadblocks at sev-
eral points. It also passed through the Central Planning Commission on the issue of the funding pattern several times. While the Commission wants it to be taken up in private-public partnership route, the State government wants the whole project to be publicly funded. The funding pattern is yet to be finalised but the State government has gone ahead and formed Kochi Metro Rail Limited, a special purpose vehicle, for the project and appointed Mr Tom Jose, a senior IAS officer as its managing director. The move appears to have got the project back on the track. A fast track, at that. Hoping that the political alignments at the Centre and the State and the success of similar projects in the neighbouring States will come to its rescue, KMRL is busy laying the groundwork so that it can take off in no time once the approval comes. “We hope to get the approval of the Planning Commission soon,” said Mr Jose. (See interview on page 24) Land acquisition, a major issue for projects in Kerala, does not threaten to derail the project as KMRL is already in possession of 85 per cent of the required land. “For the rest, we are negotiating with the owners,” Mr Jose said. “We will not have to evacuate many households but there may be business and commercial establishments.” The company is talking to them so that it can prepare a rehabilitation package that is acceptable to all. The government has already cleared appointment of more officials to speed up the survey of the land to be acquired.
The formation of Kochi Metro Rail Limited, a special purpose vehicle, and the appointment of Mr Tom Jose as its managing director appear to have got the project back on the track The project crossed a major milestone when the Japan International Cooperation Agency ( JICA) agreed to provide nearly 52 per cent of the estimated cost of `4,400 crore. JICA has already agreed to provide the fund as loan and has included the project in their next year's funding programmes. “We are waiting for the Central clearance for going ahead with the plans to avail the loan,” Mr
Jose said. KMRL went for a loan from JICA as its cost is lower than what is being offered by many similar international lending institutions, and much lower than the domestic rates. The JICA loan has a repayment period of 30 years, with 10 years of moratorium on repayment. JICA is already funding the Jalanidhi drinking water supply project in Kerala. KMRL is also working on settling the traffic issues that are sure to come up once the project is taken up. The project envisages rebuilding of the South and North overbridges – the entry points to the city – entailing rerouting of the city traffic. KMRL has successfully conducted a trial traffic diversion, a precursor to the dismantling of the North railway overbridge. It is also working on repairing and maintaining smaller routes within the city. The govern-
ment has already approved projects worth `158.68 crore to develop and repair roads and the construction of new overbridges. Delhi Metro Rail Corporation is in charge of the road development works. Doubts about its arrival cleared, the project has already entered the imagination of the people. It is time it picked up further momentum. And keep it till the destination is reached.
Land acquisition, a major issue for projects in Kerala, does not threaten to derail the project as KMRL is already in possession of 85 per cent of the required land
Out of the box
KMRL to develop land to fund project
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The NGO quarters area which the government plans to transfer to Kochi Metro Rail Limited. The 33 acres now hosts quarters of government officials. The proposal is to construct new buildings to relocate the officials and commercially develop the rest
iven that they need to think out of the box to raise funds for the project, the Kochi Metro Rail Limited and the government have come out with a scheme that will be a win-win situation for all the stakeholders. As per the proposal to raise close to `600 crore towards its share, the State government has agreed to hand over 33 acres of land at Kakkanad, on the outskirts of Kochi, to KMRL. The land, owned by Public Works Department, hosts quarters for the employees of the State government. At present, the quarters are sparsely located in the vast stretch of land. It is proposed that KMRL pull down the dilapidated quarters and construct new buildings to provide accommodation for the government employees. A part of the property will be used to raise funds for the metro proj-
ect. “KMRL will conduct a study to find out ways to maximise the returns from the land,” Mr Tom Jose, the managing director, said. It is proposed that the company develop the rest of the land into a business district with shopping malls, residential apartments and theatre complexes. The proposed business district will come up close to the Smart City project and the second phase of Infopark. Every new development on the project, which had been hanging fire for quite some time, creates a lot of enthusiasm and even anxiety among people. The company has launched a website (www. kochimetro.org) to update people about the progress of the project and ensure public support. “People can mail us their queries and they will get a reply in 48 hours,’ said Mr Jose.
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INTERVIEW/TOM JOSE
Dreaming the metro A
nybody at the hot seat at Kochi Metro Rail Ltd (KMRL) runs the risk of being compared with Mr E Seedharan of Delhi Metro. But that possibility does not seem to intimidate Mr Tom Jose, the managing director of KMRL. On the other hand, the cool-headed Mr Jose goes about his work systematically, putting in place the tools that are required to accomplish the task at hand. With the backing of a Chief Minister who wants the trains to run on the elevated rails in the commercial capital of Kerala before his government’s term ends in 2016, Mr Jose, a 1984-batch IAS officer, has quite a few things moved since he took over three months ago. At a time when cost and time over runs are the norm, Mr Jose has a tight schedule for him and his tiny organisation mandated to take up a mammoth task. “You have to dream a project 24 hours a day if you want to realise it,” Mr Jose told Editor K J Jacob in an interview. Excerpts: Kochi Metro is perhaps the largest project to happen in Kerala in the last one decade, save Vallarpadam ICTT. How do you ensure that the project is on track? With an outlay of approximately `4,400 crore, Kochi metro rail project is one of the biggest projects to come up in Kerala in recent times. This is the flagship project of the government, and it will have to be looked at from that point of view. Cooperation from all sides is a must; then only we can see it, something of an iconic project, materialising in time. As for me, this is a challenging assignment, no doubt. It’s not a routine secretarial job; it’s a 24 by 7 job. We have to dream about the project 24 hours to see it coming up. 24
There was opposition to the project on several fronts, starting from the choice of metro rail to its economic viability. Have you settled them all? A government is duty-bound to ensure that it works towards improving the quality of life of its citizens. The first thing people of Kochi want is to decongest its roads. It is so grave that we have only two options: either we go for a mass rapid transit system(MRTS), or ask people to take to foot. Studies have pointed out that the average vehicle speed in the city will be 8 km in near future. I have had a personal experience: I once had to reach the Government Guest House, Ernakulam, from Thripunithura in 30 minutes for an emergency meeting. But I had to sit in the car in the humid weather cursing everyone for two-and-a-half hours to cover 8 km. This is the situation now; it is set to worsen as the vehicle population is growing by 12-13 per cent a year in Kochi. That means in 5-6 years, the number will double. There is no alternative to an MRTS. We studied other options such as sky bus. However, we did not come across many projects which ran successfully. Metro rail was found most acceptable, and hence the decision. What about the viability of the project? The Central government had designed a decongestion programme
The traffic congestion is so grave that we have only two options: either we go for a mass rapid transit system, or ask people to take to foot
for 42 cities in which National Highways Authority of India would be involved. The condition was that the population must be 30 lakh; Kochi’s population is 27 lakh. It also has a floating population of 3 lakh. But when we think of an infrastructure project, population is not the only criterion. We need to plan for the future, put in place systems that will reduce congestion in a very practical way. It’s a no-gainer if we make a situation where people lose precious, productive time. We must identify solutions to the wastage of human resources. We must work towards providing the average citizen a reliable, safe, economic, comfortable, user-friendly and punctual mode of transport at affordable rates. The Planning Commission wants the project to come up through the public-private partnership route. What are your views on that route? Generally we talk about public-private partnership in big projects. They are viable in urban areas; they aren’t in rural areas. In case of a metro, it being an urban project is not of great help. If we were to make it profitable for the private players to invest, we will have to give a return of at least 12-13 per cent. However, our studies say that the returns will be in the region of 7 per cent. This is not sufficient to attract the private players, and hence we prefer it to be a government-funded project. We hope we can convince the commission; we expect its approval soon. What about the finances? We will require about `700-800 crore in the first year of which the major part will go for paying compensation for land acquisition. We are now tying up our resources. As for the whole project, ours estimate
We must work towards providing the average citizen a reliable, safe, economic, comfortable, user-friendly and punctual mode of transport at affordable rates
is that the State and Central governments would chip in with 15 per cent each, and the Japan International Cooperation Agency will fund 52 per cent of the project.
possible. We are working on certain traffic arrangements within the city. Some roads need to be widened, some repaired. We are spending money on renovating five city roads.
What about land acquisition? We have to acquire land mainly for stations and train depots. 85 per cent of land acquisition has already been completed; we hope to complete the process in 10 months.
There have been voices of protest against the project, especially from the merchant community in Kochi. What is the position now? I think the merchants have now realized that the Metro will benefit them most, as it will boost their business. The main business areas of Kochi, especially the MG Road and Broadway, suffer from congestion. People find it difficult to park their vehicles on the main roads and do the shopping.
How long do you think the project will take to complete? A project of this size should be completed in four and a half years. This can progress only through phases. Once we get all the clearances, we have to tender the projects. And after the physical work is over, then the trail run has to happen. Kochi roads, as you said, are already congested. How will the city cope with the project which would take four years to complete? We will ensure that the people are put to the minimum inconvenience
The project will enhance the business activity in Ernakulam. Now, the traders’ attitude is very positive; 95 per cent of them are with us
We have one of the best marinas in the country in Kochi. We want more people to come to all these places, and we are trying to give them a viable mode of transport. In fact, it will enhance the business activity. Now, their attitude is very positive; 95 per cent of them are with us. What is the status now? We have incorporated Kochi Metro Rail Limited as a company with the Chief Minister as chairman. The project is before the Planning Commission for final approval and we hope we will get the green signal soon. In the meantime, we are working with other agencies and preparing the ground so that we can take off as and when the approval comes. There are suggestions for the extension of the metro to the airport. Will you take it up? The metro has created so much of enthusiasm and hope that people are demanding its extension. I think the SPV will think of it in a phased manner. 25
BUSINESS CALLED LIFE
The Climber He may be well over 60, but one look at the speed at which Kunju Narayanan (in pic) climbs up the 30 ft coconut tree speaks volumes of the evergreen profession of coconut climbers in Kerala. Having been into the job for well over 40 years, his enthusiasm to prowl the coconut fields starting from 9 am till late afternoon hasn't diminished one bit over the years. Rather if anything, he looks forward daily to the climbing experience. Among the last full-time coconut climbers in the region of Thodupuzha, he wishes technology could be introduced to cope with the diminishing numbers of his tribe. But ask him about the
Text, photo: Kuruvilla Chacko
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latest mechanical coconut plucker and pat comes his reply, “The design in its present form is flawed. With a majority of coconut trees having different trunk width from bottom to top, the machine (which tightens itself to the trunk) will not be able to remain firmly in position while moving up the tree.� If not his logic, at least his pay is sure to make the designers of such instruments stand up and take notice: Narayanan climbs over 40 trees daily for `15 per tree (The going rate is `25 in Kochi). This is apart from the customary takeaway coconuts (three in his case). In total, an average earning of `600 per day, or a cool `18000 per month. A luxurious amount for someone living in rural Kerala.
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COVER STORY
ON
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Get ready for the
gas
Kerala’s tryst with natural gas is set to happen soon as Petronet LNG is commissioning its second LNG terminal in the country in Kochi. It will fuel Kerala’s industry and economy like none did before Aby Abraham G K The Greeks built the temple of the Oracle of Delphi on top of a flame that rose from the earth on Mount Parnassus. The Gods, fuelled the flame, they believed, little knowing that it was natural gas that caused the fire. As time passed, man began using natural gas as a fuel, but it was available only to a chosen few. Kerala, despite being called God’s own country, was not among the lucky few. Until now. The fuel, natural gas, with little divinity but a lot of economics attached to it, has set sails for Kerala in huge seafaring tankers from across the seas. It will then be distributed inside the State through pipelines. The cleaner, cheaper fuel will change the way Kerala cooked its food, fired its boilers, cooled its interiors, ran its cold storages, fed its fertiliser factories and turned the turbines in its power plants. In short, it will change the way Kerala lived its life. 29
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atural gas, a by-product of oil excavation, was often burnt away in huge quantities until a few decades away as it was unprofitable to transport the bulky fuel. The development of technology to liquefy it proved the game changer, and suddenly lightened up the global energy scene. With petroleum becoming dearer by the day and global warming and pollution threatening human existence, the world rediscovered the virtues of the clean fuel. Major powers scrambled to ensure its uninterrupted supply over long periods. India is no stranger to the fuel. All the industrialised States in the country have had access to this precious resource. Gujarat, considered the most industrialised State in India, has the most developed gas market. The State accounts for 27 per cent of India’s gas-based power generation, 30 per cent of petrochemical business, and over 50 per cent of sponge iron manufacturing capacity. It has a pipeline network of 5000 kms, distributing gas sourced first from India’s western coast and now from India’s first LNG terminal at Dahej. It was a relationship that fed each other: the growing industry de-
The cleaner, cheaper fuel will change the way Kerala cooked its food, fired its boilers, cooled its interiors, ran its cold storages, fed its fertiliser factories and turned the turbines in its power plants manded more gas, and the arrival of more gas spurred industrial growth further. The demand was so high that the Dahej terminal, commissioned in 2004, has quadrupled its capacity to 10 mmtpa from what was originally planned. Maharashtra has the second highest gas-based power generation capacity while Tamil Nadu has 31 major industries running on natural gas. Andhra Pradesh, which hosts the Krishna-Godavari basin, is fast developing as the second gas hub in the country. The industries in these States benefit from the availability of natural gas as it will be a cheaper source of fuel and feedstock.
Gas in Kerala n average Keralite’s exposure to gas has been the LPG cylinder that gets delivered at his doorstep. Some enterprising ones also used LPG as a fuel for their vehicles. The shortage of natural gas in the country precluded the need for creating a gas infrastructure in the State. But commissioning of the Puthuvypeen terminal, Petronet's second LNG terminal in the country, could be a turning point in the State’s industrial fortunes.
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LNG for whom? ■ Power generation ■ Transportation, including water transportation ■ Fertilisers ■ Bakeries ■ Food grain storage ■ Glass ■ Steel foundries ■ Cooling-heating-power generation in hotels ■ Food chains ■ Dehumidifiers ■ Tea-processing ■ Cold chains ■ Construction ■ Manufacturing of testing and safety equipment
The LNG terminal of Petronet LNG coming up in Kochi. The company's second such terminal in the country with a capacity of 2.5 mmtpa, it is scheduled to go operational in the last quarter of 2012. Petronet LNG has already approved doubling its capacity
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ting up PNG stations for the public.
KSIDC managing director Mr Alkesh Sharma and GAIL Gas CEO Mr M Ravindran exchange documents after signing the shareholders agreement for Kerala Gail Gas Ltd in Thiruvananthapuram in the presence of Chief Minister Mr Oommen Chandy. From left are additional chief secretary (Industries and Commerce) Mr T Balakrishnan, chief secretary Dr P Prabhakaran, Minister for Electricity Mr Aryadan Mohammed and Minister for Ports and Excise Mr K Babu
Future ready
KSIDC forms JV with GAIL to promote gas-based projects
K
erala State Industrial Develop- the 25th year. ment Corporation (KSIDC), The company is planning to take the investment promotion arm of up the following projects: the State government, has initiated steps to ensure that the State has the CNG for KSRTC required infrastructure ready by the The JV will establish CNG stations time gas starts flowing through the at KSRTC stations. The regulator pipelines GAIL is laying. has allowed supplying gas to bulk KSIDC had last year held a gas customers while it has not yet given conference in which entrepreneurs permission for retailing the same. In and potential conthe first phase, The JV with an sumers from differtwo CNG staent segments along authorised share capital of tions will be with representatives established in `100 crore will have a of various governErnakulam disstrategic partner to take trict. The first ment and regulatory bodies took station will be up various projects part to elaborate on located beside the ways to get the industrial sector NH47 in Aluva, as it is near to Kalaready to receive the gas as and when massery, through which the pipeline it arrives. passes. The second station is planned Recently, KSIDC and GAIL to- at Perumbavoor on MC road. gether formed Kerala Gail Gas Ltd, Subsequently, CNG stations will a joint venture company, to take up be opened at Thrissur, Kayamkulam projects using natural gas. and other places as and when the KSIDC will hold 24 per cent pipelines extend to those areas. stake while GAIL will have 26 per It is estimated that a bus can run cent stake in the JV with an autho- for 100 km with one filling of gas, rised share capital of `100 crore. and hence KSRTC can cover most of The rest will be given to a strategic the State with CNG-fuelled buses. partner at a later stage. CRISIL has The CNG stations will be operaprepared a detailed feasibility report tional immediately after the Petronet for the projects the JV could take up. LNG plant is commissioned. The company is likely to have a capex Petroleum and Natural Gas Reginvestment of the order of `250 crore ulatory Board, the regulator, has not by its fifth year and `1,000 crore by finalised policy parameters for set-
Spur lines for SMEs GAIL has signed agreements for supply of gas only with large enterprises. It will build spur pipelines only to those industries from the main pipeline. The JV will provide the last mile connectivity to the small and medium enterprises in the State. Gas training institute The JV will start a Gas training institute on five acres of land available with KSIDC as Angamaly. There are currently only two such institutes in the country – one each at Delhi and Jaipur. The gas training institute will be the first in south India and will offer short and long-term courses aimed at moulding professionals who can establish and maintain pipelines and other equipment. The youth in the State would get a training that would help them get jobs both within and outside the country, especially in the Gulf. Gas based power plants The JV has plans to establish small scale gas based power plants in industrial clusters to meet the demands of the industries there. Retailing of equipment/ instruments With the availability of gas, a market for gas based appliances will be created. The JV would like to take advantage of this and market equipments such as gas kits. Bidding for City Gas Distribution projects. The State government has decided to implement CGD projects in all the districts of Kerala in two phases. In the first phase, it will be implemented in the districts where population density is higher – Ernakulam, Thrissur, Kozhikode, Palakkad and Thiruvananthapuram. The JV will bid for taking up CGD projects as and when they are announced.
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GAS INFRASTRUCTURE With Petronet LNG ensuring the availability of gas, the State has started taking serious steps to develop the infrastructure necessary to make the most of it. The gas infrastructure currently being built and planned in the State are: • • • •
The LNG Terminal Gas pipelines – Main lines and spur lines City gas distribution (CGD) network CNG hubs and stations
LNG Terminal The LNG terminal in Kochi is scheduled to go operational in the last quarter of 2012. It has a capacity of 2.5mmtpa (~10 mmscmd), and Petronet LNG has already approved doubling its capacity. The terminal will have a jetty, unloading arms and associated facilities for safe berthing of LNG ships of 65,000 m3 to 216,000 m3 capacity. The basic structure at the terminal is the two storage tanks, each with a capacity of 155000
m3. It will also have the system to regasify the natural gas brought to the terminal in liquid form. The pipelines The re-gasified LNG (RLNG) will be transported through pipelines to the consumers. GAIL is building the pipelines to transport the gas from the terminal to the customers. It plans to lay pipelines having a capacity of 16 mmscd from Kochi to Bangalore and Kochi to Mangalore at a cost of `3,100 crore. Work on the first phase of the project, the 50 km line to FACT Udyogaman-
In Gujarat, gas infrastructure and industry fed each other: the growing industry demanded more gas, and the arrival of more gas spurred industrial growth further
GAIL plans to lay three pipelines to evacuate gas from the terminal. They are Kochi-Mangalore, Kochi-Bangalore and Kochi-Kayamkulam 32
dal, is underway and is expected to be complete by August 2012. The 720 km-second phase taking gas to Mangalore and Bangalore is expected to be completed by March, 2013. The union government has recently approved the project for laying the undersea pipeline from Kochi to Kayamkulam to supply gas to the NTPC power plant. The GAIL pipelines will pass through eight districts in the State - Ernakulam, Thrissur, Palakkad, Malapuram, Kozhikode, Kannur, Kasaragod and Alappuzha. Spur pipelines will be built from the main pipeline to the industries that require gas as and when required. CGD City gas distribution (CGD) projects are currently operating in 10 cities in the country, while it is under implementation in seven more cities. More than 200 cities will be brought under bidding for CGD projects in the next two years. Ernakulam district has been included in the fourth round of bidding for CGD projects. It is expected that CGD projects will be established in all the other districts in the State subsequently. KSIDC has formed a joint venture with GAIL Gas – Kerala GAIL Gas Ltd for bidding for CGD licenses and for supplying CNG to bulk customers (see box). KERALA’S OPPORTUNITY The arrival of natural gas throws open many hitherto unavailable opportunities to industries and entrepreneurs in the State. Setting up the supply chain – the sources of gas, the infrastructure to transport it and supplying it to the end consumers – itself offers big investment opportunities. Laying the pipes and operating and maintaining them, supplying the valves, fittings, meters and safety devices for the pipeline network, setting up LNG hubs and managing fleets of tankers are businesses with a lot of potential. Setting up CNG outlets for vehicles also offers new investment and employment opportunities.
Laying the pipes and operating and maintaining them, supplying the valves, fittings, meters and safety devices for the pipeline network, setting up LNG hubs and managing fleets of tankers are businesses with a lot of potential
The State’s industrial capital, Kochi, alone has around 700 industrial establishments – in sectors like rubber, plastics, chemicals and petrochemicals – which use liquid fuel for heating and cooling requirements and power generation. They could switch to natural gas-based power plants and use it as a feedstock and in heating and cooling. The availability of gas will also be a boost to the proposed Kochi-Coimbatore industrial corridor. Most of the industries in the State are located in the coastal areas and will be located close to the gas pipeline, making RLNG available to them. The gas demand in Kerala was estimated at 5.58 mmscmd in 2010. This is expected to grow to 26, 31 and 36 mmscmd in 2015, 2020 and 2025 respectively. As the availability and accessibility of gas increases, the market for gas-based appliances is also expected to experience high growth. Gujarat Gas, which operates in India’s most advanced gas markets, has already developed natural gas-based appliances catering to specific industries. In Kerala, too, the stage is set for developing applications that will usher in the gas age. Gas-based appliances are more efficient, require lesser maintenance and last longer than those which run on electricity. Natural gas can be directly used in geysers, air-conditioners and refrigerators. Natural gas-based air-conditioners use 30-50 per cent lesser
Work is at full swing on the Kochi-FACT gas pipeline
energy than those that use electricity, need lesser maintenance as they have no compressors and have lesser moving parts. Their life is often 2-3 times longer than that of conventional electric systems. Natural gas-based chillers and dehumidifiers could also find a ready market here. Natural gas will replace LPG, HSD and SKO in Kerala. To start with, basic, low value appliances like boilers, furnaces, and cooking ranges are expected to switch over to gas as fuel. In the medium term – 5 to 10 years – applications which help enhance productivity such as gas engines, combined heating, cooling & power (CHCP) systems (where the heat produced during power generation is used for heating/cooling requirements), hot air generators, direct-fired absorption chillers and distributed power generation will be used. In the longer term, technology driven applications like fuel cells and hydrogen cells will be introduced. However, the State needs to promote the high-end versions if it were to reap the full advantage of a gas-based economy. Only the widespread use of gas in such applications could help the gas ecosystem attain volumes which would provide them with economies of scale. FACT will be one of the first customers of the gas in the State. Fertiliser being a priority sector, the
LNG - Liquefied natural gas is natural gas that has been temporarily converted into liquid form for easy storage and transportation from the gas fields to the markets, where pipelines are not present. When liquefied, natural gas takes up only 1/600th of the space in gaseous form. RLNG (Regasified LNG): Once it reaches the markets, LNG is regasified and distributed to customers. CNG - Compressed Natural Gas is obtained by compressing natural gas to less than 1 per cent of the volume it occupies at standard atmospheric pressure. CNG is usually stored and distributed in cylindrical containers. PNG - Piped Natural Gas: The regasified LNG is supplied to customers through pipelines at atmospheric temperatures and pressures that go up to 90 Kg/cm2 in transmission lines. In city gas distribution networks, the pressure is limited to less than 24 Kg/cm2
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Advantage natural gas As an energy source natural gas has many advantageous over other fuels
N
atural gas scores over other en- and cooling applications in indusergy sources on several counts. tries and households and as a cookIt is cheaper than most other fuels ing fuel in households. The power and has the lowest carbon foot print sector used 46 per cent of the Natuamong fossil fuels (see figure). Ve- ral gas available in the country in hicles running on CNG will have 2010, but it contributes only around lower fuel costs, are more environ- 10 per cent of country’s energy basment-friendly and have higher effi- ket. Compared to coal-based power ciency due to the high octane levels plants, they are less polluting, with of natural gas. around 50 per cent lower emissions It is non-toxic, doesn’t react with of carbon and other chemicals. Gascontainers that hold it and disperses based power plants also have the adquickly in air as it is lighter than air, vantages of lower gestation periods. and hence is safer than LPG. Natu- They require lesser land and water ral gas can also and have lower fixed be easily trans- Natural gas occupies 24 cost/KWh than coal ported through based power plants. per cent of the global pipelines. They can also be energy basket, compared used to set up deApplications of centralised power to just 9 per cent in natural gas sources which satisfy India, showing the Applications of heating, cooling and potential for its natural gas use power needs. can be broadly Natural gas can increased use in the divided into two substitute expensive country – to produce fuel oil/high speed energy and as a diesel cutting down feedstock for fertiliser and chemical on as much as 20 per cent of costs industries. The power and fertiliser as per some estimates. Chillers using sectors account for around 70 per natural gas and waste heat and gas cent of the natural gas consumption driven heat pumps could be used for in India. The industrial and CGD cooling needs. 1 mmscmd of gas can projects use up the rest. Natural gas support 0.9 million households for occupies 24 per cent of the global cooking saving `6.3 billion in LPG energy basket, compared to just 9 per subsidy. 1 mmscmd of gas can also cent in India, showing the potential run 0.15 million vehicles. for its increased use in the country. As a feedstock, natural gas has Natural gas is used as a fuel in applications in the fertiliser, chemipower plants, transportation, heating cal, glass and polymer industries.
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Gas-based appliances are more efficient, require lesser maintenance and last longer than those which run on electricity company will get gas at a cheaper rate. FACT, which is currently using Naphtha as the feedstock will be able to switch over to the cheaper natural gas for its requirements. Power generation Around 35 per cent of the electricity produced in the State comes from thermal power plants, of which more than 80 per cent uses liquid fuel. This dependence on liquid fuels makes the cost of generation one of the highest in the country. Substituting natural gas as the fuel can help reduce the cost, and pollution. There are proposals to generate more than 4,000 MW power in Kerala using LNG. The major projects in the pipeline are: 1050 MW, Kayamkulam: National Thermal Power Corporation is planning to set up a 1050MW gas-based power plant at Kayamkulam. GAIL has already got clearance for laying the sub-sea pipelines for the project. It is also planning to connect the existing naphtha-based plant to gas and to further expand the capacity of the plant another by 350 MW, taking the total capacity to 1800 MW. 1200 MW, Cheemeni: The government is planning to set up a 11001200 MW gas-based power project in Cheemeni in Kasaragod district. KSIDC is the nodal agency for the project and has formed a special purpose vehicle to implement it. Land has already been allocated for the project. The feasibility report of the project has already prepared; one stage of Environmental Impact Analysis has been completed. The State government has requested gas allocation for the project from the
Pricing of gas There is a difference in prices of gas based on its source: domestic gas is cheaper compared with imported gas. The fertiliser sector is a priority one and gas is supplied at a cheaper rate fixed by the central govt. FACT has an agreement with GAIL and will be supplied gas at a cheap price.
USD/mmbtu
10
Petroleum
LPG
Heavy Oil
0
Coal Gas
5
Carbon foot print of fossil fuels
0.40 0.35
kgCO2/KWh fuel input
0.30 0.25 0.20 0.15 0.10
The power sector will have the next priority. They will get gas at a pooled price, depending on the ratio of domestic and imported gas in the pool. Other customers will get gas at the market price. Currently such customers will be using other fuels to meet their heating needs and power
Gas Oil
Heavy Oil
0.00
Natural Gas
0.05 Hard Coal
Gas could be used for distributed power generation and companies can run their own power generating units using gas. CHCP systems could be installed in industrial facilities and commercial establishments for power generation. Gas-based generators are more economical than diesel-based ones as well as backup devices such as inverters. They offer an economical and convenient backup power solution to commercial establishments. Gas-based fuel cells have the potential to deliver clean, dependable electricity wherever it is needed. LNG/CNG hubs which make gas available to industries that do not have access to pipelines and isolated residential areas. They in turn, will be fed by tankers. Petronet LNG supplies LNG to even very small customers in containers of 200 litres capacity.
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Natural Gas
1000 MW, Brahmapuram: Kerala State Electricity Board has drawn up plans to set up a 1000 MW gasbased power project to replace the diesel power plant it runs at Brahmapuram, Kochi. KSEB is learnt to be analysing various options on setting up the project.
Economics of fossil fuels
Coal
1200 MW, Puthuvypeen: Petronet LNG is planning to set up a power plant, integrated with the LNG terminal for harnessing the available cold energy to improve the performance of the power generation process. The State government has given an in principle nod for allocating 125 acres of land for the project.
20
Lignite
Centre so that it could get gas at lower prices.
needs. They would have invested some money in the infrastructure for the same, and the shift to gas will happen only gradually. The gas suppliers would have to price the gas in such a way that they are attracted to shift to gas as the fuel for their needs. Only then will rapid adoption happen. 35
TECHNOLOGY
It’s raining IT Cloud computing is the economical way of consuming IT services
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ave you ever wanted to reduce your investments in IT? After all, implementing and managing an IT solution is a costly affair. The risk of technological obsolescence and the task of securing the data and the network complicate the matter. Cloud computing provides a silver lining to all these issues. Cloud computing is a new model of computing in which IT capabilities are provided as a service, as opposed to a product, over the Internet to many customers using a large repository of shared resources. Users can access computing facilities from the cloud – a metaphor for the network of servers and storage systems – just as we get electricity from the grid. The data – documents, music, videos, business data and the like – will be stored online in huge storage systems that are part of the cloud. The programmes that process this data will also be installed on servers in large server farms. These can be accessed by customers at any time, from any location, using different devices such as PCs or mobiles over the Internet – just as you access your generic e-mail today. Software programmes that now run on the machines owned by the
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user will now be run on machines on which the processing time can be rented. Currently each user wanting to use an application such as MSWord will have to procure a copy of the same, install it on a compatible machine and then run it. In the cloud, the programme will be installed and maintained on a single machine, on which millions of users can then run it. And they have to pay only for the resources that they use, making it a much cheaper option. There are many examples of cloud-based systems today. From e-mail, social networking and office applications to ERP systems, advanced analytics and IT infrastructure and platform services, the cloud has it all. The concept is not new, though. Not long ago, mainframes dominated computing. They were huge centralised machines that ran all the programmes. The users connected to the mainframe from terminals located at different places which had no processing power and merely facilitated the communication with the mainframe. Then slowly computing power started flowing to the client side terminals from the central core – first through the minicomputers and then to the
Things to look for while selecting a cloud
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ifferent players are setting up their own clouds, competing with each other for a share of the business. IT majors like Google, Microsoft and Apple are all coming up with clouds of their own. Customers are likely to be spoilt for choice, but they would do good to evaluate the service provider before subscribing to the service. Some factors to be looked into are given below. ■ Look for open standards – Rival companies are coming up with different standards which are not always compatible. This makes moving from one cloud to another difficult in case you are not satisfied with the service. Opting for open standards will help you find other compatible services easily. ■ Privacy – Cloud based services, especially the free ones, may subject you to targeted ads and might even sell your personal information. Opt for services that respect your privacy. ■ Security and reliability – Sticking to established players could ensure that your data is secure and the service is available when you need it.
Cloud Offerings of major players
PCs. Suddenly computers came within the reach of the general public and the world forgot the mainframe. In the PC era, companies came up with machines with more and more processing power. The consumers had to buy the hardware and the compatible software products that could run on this hardware to meet their computing needs. But with the spread of the Internet, standardisation of technologies and the rise of software as a service model, centralised processing became viable once again. Advantages This shift in computing has many advantages for customers. They no longer have to invest in expensive hardware and software for conducting their business. They just need to invest in a device and in software such as a browser to access the cloud. Many cloud services such as email are free, with only the premium features being charged on pay per use basis.
Another important advantage is flexibility and scalability. Earlier administrators used to struggle to meet sudden spurts in traffic to the site, often having to purchase expensive hardware to meet the traffic. With cloud computing, they can just rent the extra resources needed to meet the demand for the period and pay only for the usage. The shift also makes life easier for the users. It avoids the hassle of installing and maintaining the programme. Generally, users get better support and security on the cloud as the service provider can afford to invest much more in it. Again one need not worry about keeping back-ups for the data, and you will not lose the data even if your system fails as it will be present in the cloud. Due to all these factors, the focus of the user shifts from the implementation of the solution to the service that can be got from a cloud. And companies can focus more on their business.
Apple iCloud Apple’s offering in the cloud space, iCloud, stores your music, apps, documents, photos, etc on its servers. It then automatically synchronises all your compatible devices - iPad, iPhone, iPod touch, Mac, or PC – so that you have the latest files on each of the devices. It also gives users 5GB space free and backs up the data. IBMSmartCloud IBM provides Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) solutions under the IBMSmartCloud banner. GoogleApps Google, a company born on the cloud is offering its cloud based solutions to businesses under the label – Google Apps for Business. It includes applications such as Gmail for business, Google Docs, Google Calendar, Google Cloud Connect and Google Groups. Google has also come out with ChromeBook, a low cost notebook optimised for the Web that is much cheaper than traditional computers and runs on Chrome OS, an operating system exclusively for the Web. Microsoft Cloud Power Microsoft is taking its applications to the cloud under the Cloud Power name. Its latest Operating System Windows 7 was optimised for the cloud. MSOffice 365 makes its office suite available on the cloud, Windows Azure is the cloud platform for developing applications, Windows Server Hyper-V gives hosting solutions, Microsoft Dynamics CRM provides CRM on the cloud and Windows Intune helps secure PCs using the cloud.
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PERSONAL FINANCE
Changing Roles Stock exchanges have much more to offer than trading in equity shares
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hat a stock exchange is a place where equity shares of companies are traded is well known. But the exchanges have much more to them than just stocks. They are transforming them into markets that let you buy or sell various assets, such as debt, derivatives, mutual funds, gold and even real estate. And that is good for investors as they are accessible, efficient and transparent markets, where people can transact at a low cost without subjecting themselves to counterparty risks. They are also coming up with innovative products that help participants manage risks associated with their businesses. The main assets that are traded on stock exchanges are equity shares. The securities market has two segments – the primary market and the secondary market. Companies come out with new IPO issues to raise capital in the primary market. The network of brokers of the stock exchanges help issuers in conducting IPOs through the book building process, allowing them to get orders from various corners of the country. The secondary market is where the securities that have already been issued are traded, thereby providing liquidity to the investors. BSE, the first stock exchange in India, has around 5000 companies listed on it - the largest number in the world - while the NSE, a more techno-savvy later entrant, has around 1300 securities listed on it.
tors to subscribe or redeem mutual fund units through them. The orders can be placed in electronic form through the terminals or in paper form through the stock brokers who now double up as mutual fund intermediaries also. The units could also be held in the demat account or as paper certificates, as per the choice of the investor.
Mutual funds The stock exchanges also allow inves-
Derivatives Derivatives are instruments that de-
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Exchange traded funds (ETFs) ETF products introduced by various mutual funds houses can also be traded on stock exchanges. They are, in essence, index funds that mimic the composition of a specified index, by investing in a basket of securities that make up the index. ETFs in gold and debt securities are also available on the exchanges, in addition to ETFs on international indices. Security lending and borrowing scheme The stock exchanges also have a security lending and borrowing scheme which enables traders to short-sell a stock – sell a stock that the seller does not own at that point of time. It enables the seller to borrow the security from investors who have idle securities with them through the clearing house of the exchange and deliver it to the buyer. This enables investors having idle securities with them to earn an extra return on them.
rive their value from some underlying asset. Futures and options in indices and individual securities are available in the national stock exchanges in the country. NSE allows futures and options trading on five major indices and 230 individual stocks. BSE has Index futures and options in 3 indices and stock futures and options in 187 stocks. The NSE has recently introduced trading in derivatives based on the global indices. To start with derivatives based on Dow Jones Industrial Average index and Standard & Poor's 500 have been introduced. In addition to equity based derivatives, currency and interest rate derivatives can also be traded on the stock exchanges. A currency future is a contract to exchange one currency for another at a specified date and price. Currency futures in four cur-
ETF Real estate
limited to big players like banks and financial institutions. The retail debt market for G-Secs was also very active in the first half of the twentieth century, with around 50 per cent of the securities being held by retail investors. But with the government fixing interest rates and the emergence of equity issues, investor interest declined. But the turn of the century saw the government once again recognising the need for retail participation in the debt market. Today retail investors
can buy or sell government securities through stock exchanges from different locations in the country, just as they buy and sell equities. In addition to govt securities, corporate bonds also can be traded in the stock exchanges. SEBI is also considering the proposal to allow real estate investment trusts to operate in the country. This will allow investors to take an exposure to the real estate markets also through the stock exchanges.
t
Debt The debt market is the largest segment of our financial markets. The market for government securities – G-Secs – with an outstanding issue size of `19,74,467 crores is the biggest part of our debt market. In addition, there is an active market for corporate debt papers such as commercial papers, certificate of deposits and debentures, with an outstanding market size of `2.2 lakh crores in 2009. The debt segments have also seen increased activity on the stock exchanges in recent times. It consists of the wholesale and retail debt markets for government securities and the corporate debt market. The wholesale debt market has been active on the BSE from the 19th century, but it is
The debt segments have seen increased activity on the stock exchanges in recent times. It consists of the wholesale and retail debt markets for government securities and the corporate debt market
Deb
rency pairs – US dollars, Euro, Pound and Yen – with the Indian rupee are available to traders. Currency options are also available for the USD-INR pair. These contracts allow investors to manage the foreign exchange risk they face. Interest rate futures have also been introduced on the exchanges. They allow traders to pay or receive a fixed rate of interest in future, protecting them against adverse interest rate movements. Treasury bill and Treasury bond futures are examples of interest rate derivatives.
Shares
G-Secs s
D
Gold
e ativ eriv
Mutual funds
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HEALTH INSURANCE
It’s portable now!
If you are unhappy with your health insurer, there is relief
H
ealth cannot be transferred from one person to another, but at least health insurance can. After mobile subscribers, it is the turn of health insurance policyholders to benefit from portability. Starting October 1, policyholders will be able to shift their policy to other health insurance providers while carrying forward the benefits – coverage for preexisting diseases and no-claim bonus – associated with their policies. The guidelines for the same issued by Insurance Regulatory and Development Authority allow policy switch with respect to all individual policies, including family floater policies. Even individual members covered under a group health insurance policy will be able to move to an individual policy or to a family floater policy in case of family members with the same insurer and then switch to another provider after a year. The benefits The introduction of portability is expected to make the health insurance industry in the country more competitive. It is expected to drive innovation leading to better products and new delivery mechanisms and to raise the service levels to a new high. If mobile number portability enabled customers to retain their mobile numbers while switching service providers, health insurance portability will allow them to retain the benefits associated with the
Starting October 1, policyholders will be able to shift their policy to other health insurance providers while carrying forward the benefits
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policy. When you take a policy, health insurers usually conduct a medical examination to identify if you suffer from any diseases. Coverage for such diseases are often refused by the insurer or provided at a higher premium or after a waiting period. If the person does not suffer from any disease while enrolling for the policy and contracts it later, the coverage for the particular disease will be limited from then on. Even if the person opts for increasing the cover later, the cover for the particular disease will remain at the previous level. Till now if such a person wanted to shift the insurer, he would have had to disclose the condition to the new insurer and would be refused cover for the same or subject to these limiting conditions again. This in effect puts the policyholder at a disadvantage as opting for a new policy meant foregoing the cover for the diseases that he already has. It is not just persons with preexisting diseases that suffer when changing their policy provider. The healthy ones also pay a price in the form of no-claim bonuses that they stand to lose. Health insurance providers reward customers who do not make any claim during the year, with a no-claim bonus – a discount in premium or an increase in cover for the same premium for the following year. If the person decides to switch his insurer, he stands to lose out on this benefit. Portability will help customers retain these benefits even if they choose to switch insurers or between plans of the same insurer, provided the previous policy has been maintained without any break: the premiums are paid on or before the premium renewal date or within the grace period of 30 days. They will be able to carry forward
The policyholder desirous of switching should give an application to the new service provider at least 45 days before the premium renewal date of the existing policy the benefits that they already enjoy – cover for pre-existing diseases, credit for waiting period already served and no-claim bonuses – even after they opt for a new service provider. How can you port The policyholder desirous of switching should give an application to the new service provider at least 45 days before the premium renewal date of the existing policy. The insurance company would then provide the applicant the portability form and a proposal form along with information about various products offered by it. Once these are filled and submitted by the policyholder, the provider would get the medical history and claim history of the policyholder from the existing insurance company and decide on underwriting the policy. The insurance company has to communicate its decision to the policy holder within 15 days of receiving all the information, else it will have to compulsorily accept the proposal. The policyholders can continue with the existing policy if the application is rejected. The ability of the customers to switch their policies without losing the benefits is expected to put the insurance providers on their guard. Customers can rest assured that the insurers will think twice before cutting down their claim amount the next time.
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HEALTH
Taming the wind Spare 15 minutes a day on meditation and learn to control mind and sharpen its focus There are a number of schools and methods for practising meditation, from which one has to select one, depending on one’s level and requirements
A
A P Jayadevan
fter listening to the advice of Lord Krishna on the need to control the mind, Arjuna, the great warrior, said: “O Lord, I understand all what you said. But the mind is restless, turbulent, powerful and violent; trying to control it is like trying to tame the wind. How can I make it possible?” Krishna’s formulation was simple: “Regular, constant practice, Arjuna”! (Abhyasena thu Kauntheya!) We live in two worlds, say the gurus: in one, we meet with our senses, mind and intellect, and everything is clear and comprehensible there. It is full of sights and sounds, tastes and sensations. In the other, the inner world of thoughts and emotions, it’s all imagination and dreams, and we interpret them to make sense of life. Together, they create the drama called life. Everyone wants the drama to be
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Concentration is the most important tool to meditate. By training the mind concentrate on a single point, we make it clearer and sharper full of pleasant scenes, but not many are successful. Most people fail to react to situations in a balanced way. Even a perceived slight or a derogatory word makes the day a hell. But spiritual traditions, religions and philosophers insist upon ‘controlling the mind’ as the single most important way through which one can remain balanced, and be happy. Controlling the mind, as Arjuna said, is a tough challenge. The gurus suggest meditation as the way forward. Sage Patanjali describes meditation (dhyana) as an uninterrupted, ‘continuous concentration of mind on a single object’ (‘thathra prathyayaikathanantha dhyanam). The whole of consciousness becomes directed towards one thing, and, in effect, becomes ‘one-pointed’. Concentration Concentration is the basic tool of meditation. Psychologists define concentration as a special form of disciplined, sustained and narrowed down attention. It also means blocking all extraneous distracting stimuli. How to do it There are a number of schools and methods for practising meditation, from which one has to select one, depending on one’s level and require-
Benefits of regular meditation • • • • •
Improved concentration, mental health Balanced mind Better energy Improved physical health, immunity Pleasing personality
ments. For the beginner, the simplest and effective method is to focus his attention on breathing. Breathing is directly connected with prana, the basic vital life force which governs all bodily functions. ♦ Sit down in a quiet place, either in the lotus position or one of its variants. Or simply, sit upright on a chair with the back straight and hands flat on the thighs and feet flat on the floor. ♦ Place attention at the nostrils or the abdomen and keep it there, refusing to be distracted by thoughts or outside events. In theory, nothing could be simpler. ♦ Feel the air drawn in, observe the slight pause between the inbreath and the out-breath. Feel the air expelled. Once again observe a slight pause, this time between out-breath and in-breath. ♦ Allow breath to come and go naturally, allowing it to settle down and become softer as your mind and body relax into your meditation. (Counting your breaths, up to 10 and then back, can help you do this easily) ♦ Practise this for about five minutes, to begin with, and slowly increase this to 15 minutes a day. ♦ Feel your ability to concentrate and the power to repel unwanted thoughts. The benefits It would be difficult for one to perform efficiently if one is mentally and emotionally pushed and pulled by a constant bombardment of things clamouring for attention. By training the mind to concentrate on a single point, we make it clearer and sharper. The benefits of concentration in
For the beginner, the simplest and effective method is to focus on breathing. It is directly connected with prana, the basic vital life force which governs all bodily functions
What the sages said “Begin each day by telling yourself: Today I shall be meeting with interference, ingratitude, insolence, disloyalty, ill-will and selfishness—all of them due to the offenders’ ignorance of what is good or evil. But for my part I have long perceived the nature of good and its nobility, the nature of evil and its meanness, and also the nature of the culprit himself, who is my brother; therefore none of those things can injure me, for nobody can implicate me in what is degrading.” What the West said “Meditation is a practice which, across traditions, is intended to still the turbulence of our outer and inner lives, and to create harmony between the individual and his or her social, spiritual and even metaphysical world. It is a practice, not necessarily based on belief, which ultimately may produce still completeness within us and on the surface of our lives. It is a practice which spans religions and secular traditions. It offers stillness, understanding, freedom and tranquillity”. Michael West (Author of The Psychology of Meditation) daily life are obvious. It we concentrate upon what we are doing, we are able to do it more effectively, and better able to remember the details associated with it. Most of our lapses of memory are caused by the fact that we were not paying proper attention in the first place. In a busy life, of pleasure and pressure, it is very difficult to be focused or centered. If you are centered, or connected to your inner self, you will have control over all your activities, and the frequency of getting dipped in anger or anxiety or worries will be less. Just spend 15 minutes a day for meditation, which can make your whole day perfect. (To be continued) 43
Family planning V2.0 Where have all the children gone?
“Y
ou have all the things here, but where have all the children gone?” asked the head of the family of labourers from Rajasthan, who had come here to lay the floor tiles in my newlyconstructed house. With a false pride so typical of a Malayali, I explained the advantages of family planning to that father of seven. But, soon after, while attending a family function in central Travancore, I found myself asking me a similar question. “Where have all the youngsters gone?” Abroad, in search of better opportunities – the answer is a no-brainer. Population growth declined in most regions of the world on the back of economic growth. But the ‘Kerala model of development’ proved that social and political action can also achieve demographic transition even when economic development stagnates. Demographers say that the transition has three stages. In the first stage, the mortality rate of the population, especially the young, declines considerably due to improved healthcare. So the proportion of children in the population will be higher and families will have to spend most of their earnings in bringing them up. Whatever assets the family has will be shared among a larger number of inheritors. This affects capital formation and economic growth, without which the window of opportunities does not open for the educated. Nor does mechanisation that could have replaced the labourers who abandon the farms happen. The globalised Malayali did not wait too long to try his luck abroad. The grass on the other side was indeed greener and so started a flow that is 44
yet to ebb. Youngsters drove themselves out in droves, only to come back with the good news and take more with them. Emigrant Malayalis numbered 18 lakh in 2004, and their remittances come to around a quarter of the State domestic product.
In the next stage of demographic transition, the large number of children born a couple of decades earlier enter the working age – 15 to 59 years. Wiser from experience, they realise the economic advantages of having smaller families and adopt family planning. As a result the proportion of working age population in society increases and that of children starts declining. As per the 2001 census, 64 per cent of Kerala’s population fall in the former category. This bulge in the working population results in lower dependency – ratio of non-working
Demographers say that a population should maintain a TFR of 2.1 to achieve replacement levels of population and if it goes below that the population would decline over the long term. And it is happening here
population to working population – for the population as a whole. Lesser responsibilities mean more savings and more spending on discretionary items, both of which lead to economic growth. Demographers call this phenomenon the ‘demographic dividend’ and it has been in play in most regions of the world which experienced sustained growth – be it East Asia or China. Kerala also gained from the trend with its per capita income that was below the national average during the 70’s and 80’s exceeding it in the next two decades. The SDP of the State also recorded a higher than average growth during the period, in spite of problems in the agricultural and manufacturing sectors. So far so good. But we are moving to the third stage where the percentage of old people in the population increases at the cost of the young and the working population. The total fertility rate (TFR) – the number of children a woman can be expected to have in her lifetime – declined steadily from 2.9 in the seventies to 2 by 1990 and to just 1.8 as early as 1993. Demographers say that a population should maintain a TFR of 2.1 to achieve replacement levels of population and if it goes below that the population would decline over the long term. And it is happening here. True, the latest census figures say that our population has increased 4.86 per cent in the last decade. But the growth rate has been dropping from the peak of 26.29 per cent in 1961-71, by around 5 per cent every decade at a higher than projected rate. Kerala’s population was expected to grow till it reached zero growth around 2050, but now it may happen in the next
Source : Census of India 2011
Last year, the total number of pensioners exceeded the number of employees in the State government service
25 years and start declining thereafter. In fact two districts – Pathanamthitta and Idukki, have already registered a drop in population of 3.12 and 1.93 percentages respectively. The number of children in the age group 0-6 also declined from 37.93 lakhs in 2001 to 33.22 lakhs in 2011, a drop of 12.41 per cent during the decade. Even Malappuram, the district which recorded the highest growth in population, showed just 0.23 per cent increase in child population for the decade. In fact, the young age groups of 0-24 years registered a decline in population even during the last decade of the twentieth century. Our population growth is being driven by the population momentum built up by the high birth rates in the earlier decades and once that generation passes away, declines will set in. The boom in the working age population is expected to vanish in the next 2-3 decades and the dependency ratio could also see a rise in the near future. The effects these changes can have on our society are profound. Enrolments have started dwindling in schools in the State. In a decade, many of our colleges would face the same fate, unless they attract students from outside. The increasing old age dependency will create other problems too. The State will have too
many old people with too little young ones to look after them. The shrinking working population will have to foot the pension bills of the growing number of pensioners. Last year, the total number of pensioners exceeded the number of employees in the State government service. The total number of pensioners in the State increased by 91 per cent during the last 15 years to 5,02,902 in 2010. An aging population will leave the State slow in adapting to the times. Old fashioned thinking is hard to change, the new Women’s Code proposed recently, proving the point. Economic growth in absolute terms could suf-
fer as the population declines, even though per capita incomes may hold on aided by the lesser population. Reversing the trend and increasing populations will not happen easily, especially in developed economies. With people becoming more individualistic, and the support system almost broken, raising children is more difficult. Often careers take precedence over children, especially with women becoming more empowered. Pro-birth policies have failed to increase the birth rate and migration has been the most important contributor to population growth in developed nations in Europe. There is a big difference in the economic effect of a decline in population growth and a decline in population per se. The first one aids growth and leads the society to prosperity while the latter makes it moribund. Kerala is now on the thin line that separates the two. Family planning has served us well in the past but now it threatens to be the Pied Piper that takes all the children away. Its time we started planning for more. For once, the prelates are right.
Age Specific Growth Rates for Kerala, 1991-2001
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46
OBITUARY
The brandmaster M E Meeran, founder of Eastern group, discovered the virtues of branding quite early on K J Jacob
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M E Meeran 1941-2011
It was almost like carrying coal to New Castle when he made curry powders and masala mixes and sold them to households which, for generations, made it for themselves
o shop-owner in rural Kerala of the sixties felt it necessary to brand his shop, but M E Meeran did. “People used to refer to shop-owners depending on the stuff they sold,” he once told me. “So there was Irumbu Pokker who used to sell steel and hardware and Meen Mathai who sold fish. There were several such ‘pet’ names.” Meeran did not want to fall prey to their ingenuity and hence named his shop Eastern Trading Company. The man who stumbled on the virtues of branding his small shop at the foot of the High Ranges in Kerala was the world’s largest manufacturer of blended spices when he passed away on September 8 at the age of 70. One of the preeminent entrepreneurs Kerala has produced, Meeran’s legacy lay in discovering a business where none existed. It was almost like carrying coal to New Castle when he made curry powders and masala mixes and sold them to households which, for generations, made it for themselves. Born at Nellimattom near Kothamangalam in 1941, Meeran attended St. Johns School, Nellimattom. At the age of 20, he set up a stationery shop and later moved to Adimali and opened Eastern Trading Company. In 1976, he started distribution of major local and national brands. Selling stuffs in the hilly district of Idukki, Meeran not only earned a profit but also learnt some valuable lessons in logistics and supply chain management. His first product, Eastern Coffee, did not fare well as he could not stand up to the vagaries of an international trade. But the curry powder he produced in a small facility he oversaw was an instant hit among his regular customers. They discovered that Meeran’s powder got them more result with less quantity, compared
with the mostly unbranded products then available in the market. That was the beginning of a great journey. He introduced products one by one. And the catchment area started growing. He floored homemakers with the seasonings and flavours, the formulae of which he and his wife, Nabeesa, decided. True, Meeran was smart enough to identify opportunities. But he was equally smart in identifying threats as well. And remedying them, too. When people doubted the quality of chilli powder that came in packets saying they were adulterated, Meeran knew it was a tough challenge to convince people otherwise. “I recruited people from the neighbouring areas to the production and packaging departments.” Now, it became their responsibility to stand up for a product they make. They must have done a thorough job of it. Today, the Eastern brand commands over 70 per cent of the curry powder market. His products are available in almost all parts of India as well as in West Asia, Singapore, US, UK, Canada and Australia. Meeran did not limit himself to spices. He created such brands as Sunidra mattress, Eastern treads, King Richard shirts and Eastern mineral water. The group today has a turnover of `600 crore. Among the several recognitions that visited him was the excellence award for ‘Outstanding Entrepreneur’, instituted by KSIDC when it celebrated it golden jubilee recently. Meeran represented a generation which tied entrepreneurship to the ability to keep the ears close to the ground and picking up even weak signals of opportunity. Something that business schools don’t teach. 47
ROADS, PORTS, RAILWAY AND AIRPORTS
KERALA STATISTICS
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ROADS
Industrial and economic development of a State greatly depends on its infrastructure, roads being an important component of it. Kerala has a one of the widest networks of roads in India. Road density in the State is 417 km/100 sq km, the highest for an Indian State, whereas the national average is 100.39 km/100 sq km. The length of the road per lakh population is 509.23 km, whereas the national average is 321.3 km. Kerala has nine national highways (NH) and 71 State highways (SH).
Major district roads (MDR) are spread across the length and breadth of Kerala. Road
length
%
SH
4,655 km
20
NH
1,524 km
MDR 17,117 km
7
73
Apart from this, there are over 1,04,257 kms of roads maintained by Grama Panchayats and Block Panchayats Out of the 14 districts, Kottayam has the major share of PWD roads with a length of 3,016.765 km and Wayanad has the lowest share with 766.352 km. There are 2179 bridges in Kerala, of which 627 are on State Highways and 1552 on Major District Roads.
National Highways in Kerala NH No.
Portion in Kerala and name of NH
Length (km)
47
Walayar-Kaliyikkavila (Salem-Kanyakumari)
416.800
17
Thalapadi-Edappally
420.777
49
Kundannoor-Bodimettu
167.593
47A
Kundannoor-Willington Island
5.900
208
Kollam-Aryankavu
81.280
212
Kozhikode-Muthanga
117.0
213
Palakkad-Kozhikode
125.304
220
Kollam-Kumily (Kollam-Theni)
189.300
47/C
Vallarpadam-Kalamassery
17
Total length
1540.954
PORTS
Kerala’s coastal length covers 585 km. The geographical location of Kerala is very close to the international shipping route. It has got 1 major port located at Kochi and 17 minor ports. Cochin Port, the only major port in Kerala, covers 827 hectares. With a water frontage of 7.5 kms, it has connectivity to hinterland through NH 47, NH 17 and NH 49. Of the 17 minor ports, three are considered as intermediate ports based on berthing, cargo handling and storage facilities available in them. Nowadays cargo handling takes place at Vizhinjam, Azhikkal and Beypore ports. Vizhinjam handles about 1000 tonnes annually. Beypore handles 50,000 tonnes and Azhikkal 5000 tonnes annually. International Container Transshipment Terminal, Vallarpadam Kerala hosts the only ICTT in the country at Vallarpadam, Kochi. The first phase of ICTT was commissioned on February 11,2011. It can handle cargo up to 1 million TEUs per annum. RAILWAYS
Vallarpadam railway bridge
Kerala has two railway divisions: Thiruvananthapuram and Palakkad. The State has a total railway length of 1,148.9 km and covers 13 railway routes. There are 200 railway stations in the State. Vallarpadam railway bridge (4.62 km), connecting Vallarpadam ICTT to the rest of Indian railway network, is the longest railway bridge in India. AIRPORTS
Kerala has got three airports at Thiruvananthapuram, Kochi and Kozhikode; the fourth one is under construction at Kannur. International and domestic flights are handled from all the three airports. Thiruvananthapuram and Kozhikode airports are run by the Airports Authority of India and Kochi airport by Cochin International Airport Limited (CIAL). CIAL is the first greenfield airport to be setup in public-private partnership (PPP) model in India. With an annual passenger movement over 3.9 million and 411 aircraft movements per week, it has the fourth largest international passenger traffic in India. Trivandrum International Airport is the first airport in Kerala and the first international airport in a non-metro city in India. Calicut International airport is also known as Karipur airport. It is the seventh busiest airport in the country in terms of international passenger traffic. 49
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`:50 US:$5 RNI No. KERENG02297 Enterprise and Economic Update Kerala, a venture supported by KSIDC