Showing posts with label UPA government. Show all posts
Showing posts with label UPA government. Show all posts

Saturday, October 13, 2012

PROFILE: SOMNATH CHATTERJEE

Whether or not they agreed with his style of working, MPs would surely miss this headmaster in the next Lok Sabha

Even though MPs requested him to refrain from taking such a decision, since the house is most indisciplined during this time, Chatterjee reiterated that the people of the nation have full right to know what goes on in the Parliament and that by telecasting Zero hour, it would be easier to control the house. In his four decade long career as a politician, July 23, 2008 was an unfortunate day for him, ironically just two days before his 79th birthday. It was the day when he was accused by his party members in CPI(M) of trying to save the UPA government and was expelled from the party.

There is a long story behind him being titled as the headmaster. Somnath Chatterjee was famously infamous for interrupting MPs, while they were locked in debate. Some MPs also complained that despite being given notice beforehand, he would not give them time to raise their issues. Whenever there was noise and chaos in the house, he would scold members as if they were students and he was the headmaster. When he was accused of these charges by one of the members of his own party, he became emotional and cried in the Lok Sabha. When he was bidding adieu, even members of CPI (M) were sad. Indeed, his presence will be sorely missed by supporters and detractors alike.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Tuesday, August 21, 2012

Can we invest in some vision please?

Two issues have engaged pundits in recent days. The first one relates to the Supreme Court verdict that seems to have gone against Anil Ambani. Apart from furious number crunching, the verdict has also triggered a spate of stories on the role of lobbyists used by India Inc. to win battles and wars in North Block, South Block and many other blocks that stand as sinister reminders of a feudal and oligarchic India that refuses to fade away. I am not joking, but I think I now know more about Nira Radia than Nusli Wadia! And honest to goodness, I know some ambitious young television journalists who seem to be confused about who is who between the two!!!

The second debating point was triggered by the stubbornly persistent foot-in-the-mouth disease of Environment Minister Jairam Ramesh who trashed Indian policy and Indian policymakers while visiting China. This has led to a spate of stories on the strange ability of Indian ministers to say things which embarrasses the UPA government. Oh yes, I got to read dozens of delicious ‘recall’ stories about how the tweet about flying cattle class was the beginning of the end for Shashi Tharoor.

All the sound, fury, punditry and polemics generated by the two controversies have missed – as usual – missed the central issues that need to be addressed: What should be the relationship between India Inc. and the government? And, what should be India’s strategic posture when it comes to China? The stark reality is that there is a very depressingly familiar lack of vision and a long term plan on both counts. And both India Inc. and policymakers are equally guilty of this short-sightedness.

Not one account of the ‘lobbying wars’ unleashed by the Ambani brothers seems to acknowledge and accept the fact that the corporate sector and the government work very closely together in the US, Japan, South Korea, Brazil, Russia and China. That is a reality no amount of moral grandstanding by columnists will erase. You must be living in a fool’s paradise if you think Embraer, Lenovo, Huwaei, LG, Hyundai, Toyota, Honda and numerous others have become global powerhouses solely on the basis of entrepreneurial genius and without any active as well as clandestine ‘State’ support. In India too, the corporate sector and the government have a cosy relationship. Like elsewhere, policymakers in India often take decisions that brazenly favour the corporate sector – many might say unjustifiably. The problem is, India Inc. and the government are happy with short term gains in the form of tax breaks, cheap land and other freebies. Ask yourself this one troubling question – with the tens of billions of dollars of market capitalisation, how is it that no Indian business house has managed to become a serious player in the telecom equipment business? Or in the IT server business? Or in the serious infrastructure business where Big Boys play day and night?


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Saturday, July 07, 2012

Painful but cathartic verdict

By terminating all 122 licences issued by former telecom Minister A. Raja, the Supreme Court has shown its utter disgust and contempt for policies that smack of bias and are rigged to serve partisan interests. Will the government now come up with a transparent policy for allocating licences?

Much muck and dust has been flying around ever since the 2G scandal prised open yet another egregious instance of the unholy nexus between our crooked politicans, complicit bureaucrats and compromised businessmen. The landmark Supreme Court judgement early this month, cancelling all 122 2G licences issued by former telecom minister A Raja, brings to an end the kerfuffle that had been reverberating in the nation’s corridors of power and business. The SC verdict marks the opening of a new chapter in an otherwise so far sordid saga that has dogged India’s telecom sector in recent years. Immediately, following the verdict, telecom minister Kapil Sibal announced at a hurriedly called press conference that his government welcomed the SC ruling, which would help “remove the uncertainties clouding the telecom sector.”

Meanwhile, in the aftermath of the apex court ruling, several telecom operations seem to be in a state of funk. Many of them snapped up licences thinking they were buying into India’s telecom success story. But the SC ruling, some people say, seems to have thrown out the baby with the bath water. Copping the blame on the telecom players for obtaining a licence given out by the government on the basis of a policy that the Supreme Court has now repudiated seems a tad rich. Unfortunately, in light of the cancellation of telecom licences, these operators now look like having become dupes of the con played out by Raja and his underlings. The court’s ruling also comes as a stinging excoriation of the UPA government which, despite being alerted by various quarters to the flimflam orchestrated and pulled off by Raja and his minions, chose to string along with the first-come-first-serve policy for granting 2G licences.

Some players are certain to bear the brunt of the SC judgement more than the others. Already, Bahrain Telecommunications Co (Batelco) has announced that it is pulling out of its joint venture with STel and exiting India. The C. Sivasankaran-owned STel was among the beneficiaries of Raja’s 2G spectrum allocation. United Arab Emirates operator Etisalat, Norway’s Telenor and Russian company Sistema are the other foreign firms affected most as they had bought shares in the Indian companies whose licences have been scrapped. The court has given these companies four months’ time to shut shop. With the cancellation of all its 22 licences, Uninor (Telenor’s JV with Unitech) is the worst affected by the judgement. Though the company has one of the lowest average revenue per user of Rs 98, Uninor has the highest number of subscribers (36 million) amongst the greenfield operators. It has a workforce of around 17,500 and is operational in 13 circles. Uninor has also made substantial investments of around Rs.140 billion in the market.

Not everybody stands to lose though. Older incumbents such as Airtel, Vodafone and Idea stand to gain a lot since they are the ones who have been in operation well before 2008 when Raja gave out the new 2G licences. Idea has not done too well in the new circles it had won and hence its loss of nine circles does not amount to much. These players will most likely bid for maximum circles when fresh auctions are held so as to expand their reach further. “The court has said the government must now get the market value of these licences,” said a visibly elated Subramanyam Swamy, who was one of the parties that challenged the 2G licence allocations in the court.

While the angst of players adversely affected by the judgement is understandable, the SC has, in one deft stroke, dispelled the fog and murkiness surrounding Raja’s 2G licence allocations. The court’s verdict has ensured that the law of the land prevails. It has sent out a strong message to both the industry and government that crony capitalism will not be tolerated and that corrupt business deals facilitated by a collusive government will be subjected to judicial scrutiny. Says Member of Parliament Rajeev Chandrashekhar, “This is the first time that there has been such a detailed judicial scrutiny of the licence issuing process. This judgment signals that the sector is finally open to only those investors and stakeholders who wish to invest, build and succeed by following the laid down rules and laws.” He adds that the judgement clarifies many policy confusions and also lays down the mammoth task of cleaning up and reorganising the sector over the next year or so. “This scrutiny and the judgement establishes the unambiguous basis for licence grants through auctions or market-based mechanism by the government today and in the future.”

In order to prepare the ground for a fresh round of 2G spectrum auction, the Telecom Regulatory Authority of India (TRAI) has come out with a pre-consultation paper. The regulator has also sought to allay fears of existing subscribers in circles where telecom licences of operators have been cancelled. According to TRAI, subscribers need not fear about their connections as they can port to other service providers in their respective circles. While the modalities for holding the auction are being worked out, the government expects the auction to fetch a revenue of about Rs 750 billion. However, following the cancellation of licences there is likely to be an overabundance of spectrum in the Indian market, which will ensure that prices remain low. Besides, incumbent operators have already paid through their noses for 3G and Broadband Wireless Access (BWA). These investments will take a long time to turn profitable. In such a scenario, it seems doubtful whether these service providers will warm up to participating in another round of auction. Moreover, the incumbents (whose licences have not been cancelled) have enough 3G spectrum which can be used to accommodate new subscribers. Says Rajan Mathews, Director General of the Cellular Operators Association of India (COAI), “I don’t think that kind of money is available with domestic players. That is why the government itself indicated that it will raise the FDI limit to 74%.” Just to ensure that his reasoning comes across more convincing, Mathews draws your attention to 12th Five Year Plan proposals for the telecom sector. “The preliminary numbers put out by the Planning Commission suggest Rs 6,500 billion as the outlay for rolling out various initiatives by government. They themselves admit that 80% of that would have to come from international sources.”

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
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