Corruption: Indian Media in Dock

Corruption: Indian Media in Dock


Like the on going scams of various kinds in the country, the credibility of Indian media groups seems to have hit at all time low notwithstanding many a scam they claim to have exposed in recent months. It is another matter that the same “scam story” is marked exclusive on multiple channels or in various newspapers. Now it is media versus media.

After the paid news scandal – when it came to light that billions of rupees are paid to popular newspapers, magazines and news channels by influential politicians, corporate czars, Bollywood stars to get distinct visibility – the latest to hit the media houses is an allegation that they acted as lobby groups for one or the other party in the latest 2G spectrum scam, that is alleged to have cost the exchequer billions of rupees.

It is naïve to believe that wide spread corruption in all sections of Indian life, including judiciary, could spare media where the competition is intense. However, what should heart media is its holier than thou image. So obsessed is India’s “world class” media with the internal affairs that rescue of Chile miners or those killed in the New Zealand mine explosions do not make into prime time slot or get a few lines on the front pages. There is race to outdo others, raise the Target Rating Points (TRP) or circulation at whatever the cost. So you have the front two pages exclusively of the Times of India Bangalore, November 20, 2010 edition ironically devoted to an advertisement of telecom company. Every advertiser is welcome: a political party, a corporate house or marriage invitation through a newspaper. You just have to throw money to have your voice heard. The secretive paid news format is different ball game altogether were interests of all the parties – except the reader or viewer - are taken care with utmost caution.

Now, the tapes have emerged with revelations of conversations between media persons and political lobbyists. The names of India’s celebrity NDTV anchor Barkha Dutt and Hindustan Times columnist Vir Sang­hvi have been dragged into controversy with allegations that they lobbied for certain political masters and corporate biggies. The NDTV has issued swift denial on its website in response to the “Open Magazine” cover story dated November 20, 2010 in which the anchor’s alleged conversation with alleged corporate lobbyist Niira Radia's is presented in way that is considered defamatory. NDTV website claims that it is clear misrepresentation of conversations between Barkha Dutt and Nira Radia. Another magazine “Outlook India” in its special focus “Power Tapes” details the nexus between journalists, politicians, babus (bureaucrats), corporate houses. “Smear campaign astounding. Onus on Open and Outlook to prove quid-pro quo of any kind, before vilifying individuals and their work”, says Dutt in her tweet.

Is it the dog eating dog syndrome as India’s journalists fight it out in the open or is it a just commercial fall-out they are worried about? Despite the constitutional freedom granted to Indian media, most of them have failed their citizens not withstanding some honorable exceptions. The nexus between those in power and media are so explicit that sometimes government honors media houses as the best in some category while the media – the TV channels in particular - pays it back by honoring those in power as the person of the year and so on! The channels and publications organize Bollywood-style events and honor virtually every influential minister and corporate honcho. The Press Council of India virtually does nothing as it has no powers of any kind. True to its image it has remained “watch dog”.

As the fight takes curious turns on “news channel scams” millions of Indians would rather switch over to titillating programs such Big Boss (IV) or Rakhi Ka Insaaf (again on NDTV’s sister channel) although they are as controversial albeit for different and somewhat likable reason: vulgarity .

Gopal Sutar

Calls to India to cost more

Calls to India to cost more

By GOPAL SUTAR | ARAB NEWS

Published: Nov 10, 2010 23:08 Updated: Nov 11, 2010 17:03

The Telecom Regulatory Authority of India (TRAI) is seriously considering increasing termination rates for the international operators for the incoming calls, especially in case of those based in the Gulf countries.

According to the reliable sources in TRAI, this is being done as per suggestions received from various telecommunication operators in India. This would also mean huge jump in the government revenue at the cost of millions of Gulf-based Indians who will have to pay more for each call they make to India as and when the TRAI implements the hike in the termination fees. “There is no reason for TRAI to dither,” feels an analyst in the telecom sector.

According to the sources, Indian companies charge 1.2 cents on an average per call as termination charges as against 13 cents charged by the Gulf-based companies for the incoming calls in those countries.

The high termination rates applied by them are considered anti-competitive by some in India. One of the main objectives of TRAI is to provide a fair and transparent policy environment that promotes a level playing field and facilitates fair competition and therefore sooner or later it has to look into this.

Experts in India feel that even regulators in the Western countries such as the United States have put safe guards in place against the overcharging by foreign market powers. If unchecked, operators from other countries may follow the Gulf model to earn more at India’s expense.

According to TRAI sources, India’s forex loss is to the tune of Rs.8.25 billion — nearly $180 million — due to differential settlement costs. The operators in India received around Rs.4.75 billion annually from telecom companies in the Gulf as termination fee, but paid over Rs.13 billion for terminating their traffic in the Gulf.

“The case has been made to the government pointing out this huge discrepancy. It is more difficult to accept this in India where the competition is severe due the presence of several private and government operators. This is not the case in the Gulf where one or two operators have virtual monopoly over a large market in each country,” says an official from a private operator who did not want to be quoted.

http://arabnews.com/economy/article185824.ece

Diwali: Gold Retains Luster

Gold retains its luster with increased demand

By GOPAL SUTAR | ARAB NEWS

Published: Oct 23, 2010 23:42 Updated: Oct 23, 2010 23:42

BANGALORE: It is said that the gold has worked down from Alexander’s time and its significance has grown even more today as the precious metal is perceived as a shield against financial turmoil, weak currencies and inflation.
When it comes to India, the over all demand seems to be going in only one direction: Up. With mother of all festivals — Diwali — fast approaching households are geared to go for the precious yellow metal in the coming days. Despite high prices, there is no let up in the gold buying though some shopkeepers feel that for some customers the high prices remain a dampener.
According to the World Gold Council (WGC) gold jewelry demand in India remained robust in the first six months of 2010. The volume of growth increased 67 percent to 272.5 tons as compared to 163 tons in H1 2009. India’s total demand for gold rose by 94 percent to 365 tons in H1 2010 as compared to 188.4 tons in H1 2009. In value terms, the country’s gold demand grew from Rs. 273 billion in H1, 2010, to INR 605 billion in the corresponding period a year ago. It is quantum jump of 122 percent.
All eyes are now on the much awaited festival — Diwali — in the first week of November. In India, it is traditional and considered auspicious to buy gold during Diwali.
With marriage season to follow immediately, the year holds great promise to the gold merchants. Gold is not only given as gifts in marriages but more importantly as dowry to brides by her parents as a “goodwill” gesture and security although the tradition is frowned by some.
“We wish the prices had not touched this high”, feels an executive at Bangalore’s Shubh Jewelers who claim to be the world’s largest manufacturer of 22-carat gold jewelry. He is bit worried that anticipated crowd rush has not yet begun.
A bit alarmed, the gold business houses have started bombarding with the advertisement of all kinds and luring the customers with discounts and gift vouchers. For example, Reliance Money Infrastructure Ltd (RMIL), a part of the Reliance Capital, announced the launch of gold coins with India Post logo.
They have set an ambitious target of selling 300 kg during the Diwali eve. The special promotional offer — open till Diwali — ensures 0.5 gram of gold coin free on every purchase of 10 grams.
However, not everyone agrees that 2010 would be that great as made out to be.
“In 2008, the gold in the first six months sold over 700 tons and therefore I can’t comment on how it will grow this year. Nonetheless, 2010 will be certainly better than 2009,” says Suresh Huda, President of the Bombay Bullion Association Limited, established in 1940 and currently celebrating its golden jubilee.
He also points out that though gold articles sell well during the festive season quite a few consumers are going for the silver items as gift package since not every one can afford gold at these prices.
“Also, there is some diversion to gold exchange traded funds (ETFs) as investment tool”, he says as companies hand out customary festival bonuses in cash. Nonetheless, gold remains an attractive proposition for millions of Indians.
The year 2010 also added its own charm as India bagged 38 gold medals and stood second in the list after Australia’s 74 medals in the recently concluded Common Wealth Games in New Delhi making gold much talked about subject in the country more than in any other year.

http://arabnews.com/economy/article168390.ece

Rising Rupee Hits Indian Exports, IT and NRIs

Rising Rupee Hits Indian Exports, IT and NRIs


Bangalore, October 18, 2010:

Indian Rupee that soared to 43.09 against dollar on October 15, notching its highest level since August 2008, has become cause for worry for exporters, the country’s much talked about IT industry in particular and Non-Resident Indians (NRIs) who send money to the home country on regular basis.

The concern is so explicit that India’s second largest software exporter Infosys Technologies, headquartered in the city, cited currency volatility as one of the factors for being “cautiously optimistic” about the IT company’s long term prospects despite beating its own and the market predictions by posting double digit revenue growth for Q2 2010. The spectacular results have been achieved by the company for the first time since Q2 FY 08. Most of the IT companies have been singing the same tune saying rampaging rupee could maim the exporters more if the Reserve Bank of India – India’s Central Bank - fails to check the soaring rupee. About 98% of Infosys’ earning for example is in foreign currency.

Mr. M.D. Pai, Board Member of Infosys told The Arab News that soaring Indian rupee is hurting India's exports, as the strength is not based on fundamentals but on technicals due to strong flows of capital. “Surplus in the current account allow for space to manage but sudden flows are difficult to manage and that is why we need the regulator to play a balancing role. For us rupee appreciation hurts revenue in rupees and margins. The solution for this is sterilization of excess flows, and other means like a cap on borrowings overseas, cap on NRI deposits based on the absorption capacity of the economy”, he says.

Alarmed, RBI has intervened by buying dollars through public sector banks to stem the appreciation further but experts believe that rupee could trade from 44.15 to 43.25 against the dollar at least in the short term, come what may. Overseas investors are expected to pump in more dollars especially in the Coal India’ Limited Initial Public Offer – India’s largest IPO at Rs. 154 billion - that hit the market on October 18. The rupee would remain strong till the overall dollar flow slows down.

Exporters apart, for the NRIs, especially in the Gulf, it means clear dent in their earnings since most of them send the money back home regularly. “My son who works in Jeddah makes it a point to send about SR 1000 every month but in rupee terms the amount is getting lesser in last few months while everything in the market costs higher these days ”, rues Fatima who also works in a private company in Bangalore to support her family.

Moreover, the NRI interest rates on bank deposits have been low - less than 3% even for long term deposits in rupee - and so it is double whammy for those who park and send their money to families in India. In last few years rupee has swung from 39.61 (February 2008) to 50.56 (March 2009) against the dollar. The rupee has appreciated by 8% in the last seven months from 47.60 in March to 44.05 in the current month. “We must tax on the foreign fund flows to check the enormous volatility in the rupee value against the major global currencies”, feels one of the top IT honchos. If unchecked, the see-saw battle would remain part of the Indian export story and NRIs.

Gopal Sutar

India’s New Tax Code “Fixes” NRIs

India’s New Tax Code “Fixes” NRIs



India’s New Direct Tax Code (DTC) described as generous to residents unfortunately seeks to extract a mouthful from millions of non-resident Indians (NRIs). It is good news that the Government is all set to replace the age-old Income Tax Act of 1961 and bring far reaching changes in the tax structure with an aim to tax those citizens in lower income bracket as little as possible, bring the growing number of rich people in the tax net and prevent tax evasion in the notoriously corrupt system.



With the possibility of archaic rules getting replaced with new ones from financial year 2011-2012, the emerging India seems to have welcomed the path-breaking initiative taken by the Central Government. However, scores of NRIs are disappointed and are sure to seek changes in the proposed laws that affect them negatively. For example, under the DTC, NRIs staying in India for more than 59 days in a year and 365 days or more over a period of four years prior to the financial year will be considered residents and are therefore liable to be taxed on their global income. Currently they can stay in India up to 181 days in a year and still have no tax liability on the income earned outside India. Such NRIs typically do not have citizenship of any other country and this is particularly true with those living in the Gulf countries where citizenship is extremely difficult to get. Most of the companies or employers send their employees on two to three month vacation period albeit once in two or three years. Some NRIs prolong their stay because of medical, social or business reasons.



Whatever the reasons, what the DTC implies is henceforth NRIs must count their days whenever they visit India. The proposed 59 day stay restriction to save their hard earned money from being taxed has put them in fix. The message is clear: “If you are an NRI, you need to think twice in case you wish to stay in your home country for too long!”


Gopal Sutar

Indian Rupee Where Does It Go From Here?

Indian Rupee Where Does It Go From Here?

In budget 2010-11 India’s Finance Minister Pranab Mukherjee wanted to formalize a symbol for the Indian Rupee (INR) to reflect and capture the Indian ethos and culture. With new symbol approved by the Indian government on July 15, the country has gone gaga over the selection of the symbol which is a fusion of Roman and Indian Devnagari script. However, the million dollar (rupee) question is will the Indian Rupee have pride of place along side the select club of currencies such as the US Dollar, British Pound Sterling, Euro and Japanese Yen that have a clear distinguishing identity and global presence? It does not seem so for a foreseeable future.

Some call it as a sign of India’s growing aspiration while critics say it is needless exuberance given the economic challenges the rising India faces. Several G 20 nations including all powerful China have not gone for the unique symbol since they want their currency to be globally relevant before taking such a step. India will not gain anything by internationalizing its currency symbol since there are virtually no takers for the Indian currency in the global market or even accept it as reserve currency. Moreover, unlike the US Dollar or Euro, Indian currency is not freely convertible. In fact, India itself does its trade and business mostly in US Dollars.

It is true that India’s near 9% growth rate makes it a nation to watch with admiration. However, given its rich and poor divide, high unemployment, huge budget deficit and high inflation, the country has long way to go. In fact, the UNDP study, ironically revealed two days ago before the Indian government approved the rupee symbol, pointed out that acute poverty prevails in eight Indian states, including Bihar, Uttar Pradesh and West Bengal (the most populated states) together accounting for more poor people than in the 26 poorest African nations combined. Given these bitter aspects, there is no use in having the new rupee symbol on computer key boards alone – this can be incorporated within no time - simply because India happens to be world’s software hub.

Gopal Sutar

BP or no BP, oil industry will fight back

BP or no BP, oil industry will fight back
By GOPAL SUTAR | ARAB NEWS
Published: Jul 6, 2010 23:34 Updated: Jul 6, 2010 23:34
BANGALORE: One of the dire consequences of the Gulf oil spill is that the reputation of the entire oil industry, and not just that of BP, seems to be in tatters.
The image of the industry in terms of its contribution to the world economy and the environment has taken a severe beating despite the fact that BP alone is responsible for the current disaster. Even after weeks, the giant oil company continues to struggle to cap and clean the Gulf of Mexico spill. Against such catastrophic failure, there are serious concerns raised over the safety measures employed by other companies involved in deep-water drilling activities. All these companies are under public scrutiny as they too are prone to accidents of a magnitude one cannot even imagine.
Take the case of BP. In a filing on July 5 to US securities regulators, the company has put the cost of its response to the Gulf of Mexico oil spill at about $2.65 billion, up from $2.35 billion as on July 2. The costs include spill response, containment, relief well drilling, grants to Gulf states, claims paid, and federal costs, but not a $20 billion fund for Gulf damages the company created this month. BP has said that it has received more than 80,000 claims and made almost 41,000 payments, totaling more than $128 million. More claims are certain to follow in the coming days and weeks.
Against this background, the need to explore alternatives for clean energy options, including nuclear and clean coal, is felt more acutely as never before. Does this mean we all should give up on fossil fuels? Is it possible to survive without oil and only on nuclear and other forms of energies such as wind and solar? With no solution on the horizon the answer is obvious no.
However, it is true that much of the goodwill generated by the oil industry whether it is Shell, BP, Exxon Mobil, Chevron or Saudi Aramco — has been wiped out by the Gulf oil spill. But the situation is unlikely to unnerve them.
Whether one likes it or not the demand for over all oil production is expected to remain steady and go up in the near future notwithstanding the fall in oil prices by more than 3 percent on July 6 as fiscal problems in the euro zone and downbeat data from China and the United States compounded the problem. But the powerful oil industries will fight back knowing that these are all short-term setbacks, including the White House ire rover the Louisiana rig spill, resulting in the ban over deepwater drilling. The oil companies are aware that in the absence of credible alternative, depleting oil reserves on land and in shallow waters, the world has no choice but to look at deepwater oil reserves, perhaps with improved technology, new attitude toward environment and stricter regulations.
The world needs energy and till some other alternative is found, the oil alone stands for world energy security. Other than Gulf of Mexico-like accidents, the industry needs to be more careful about public relations fiascos like the one committed by Tony Hayward, the BP chief executive who went to the Isle of Wight for a yacht race one week after his company’s deep-water drilling platform had blown up in the Gulf of Mexico on April 20, killing 11 workers resulting in the massive leak that has caused unprecedented damage to the coastline in four US states.
The accident of this nature might be one in a million kinds like in nuclear power case studies. However, what is important is industry leaders showing concern and regret for what’s gone wrong. They simply can’t afford to project themselves as easy-going corporate czars.
http://arabnews.com/economy/article80332.ece

Bhopal gas tragedy should be seen in right perspective

Bhopal gas tragedy should be seen in right perspective
By GOPAL SUTAR
Published: Jun 17, 2010 23:34 Updated: Jun 17, 2010 23:34
THE return of the Bhopal tragedy to the headlines especially in Indian media is no surprise. As someone who lived in Bhopal for a few years just after the gas tragedy, it hurts me more that anyone else. The only change is that the latest fuss is made over the “light punishment” meted out to those seven people “responsible for the tragedy,” the great escape of the much wanted white man, the need to extradite and punish the “mass murderer” to render justice to the victims.
The rest is the same: Verbal lashing on the television with virtually everyone saying that justice is not done to the people and so on. All this noise is being made despite the fact that justice in India is delivered very late as courts here often take decades or even generations to pronounce judgments. Even in the so-called “fast track courts” it takes years for the final judgment to be pronounced. Add a few more years for the sentence to be executed and when this happens there are celebrations all around, hailing the Indian judicial system! Why it is that the recent Bhopal judgment has caused such a furor? Everyone seems to go with the gallery, baying for the blood of 90-year-old Warren Anderson who was the then CEO of now defunct Union Carbide Corporation (UCC). The sentencing of seven Indian employees to two years in prison after more that 25 years of tragedy caused by the UCC is being ridiculed to no end. We need to understand that industrial accidents have happened in the past and will continue to happen with or without people like Anderson at the helm. If any thing, Anderson should be appreciated for showing courage to be in India immediately after the accident and later doing all he could despite failures of the local administration on every front from organizing medical aid to disbursement of money during the years that passed by. India did not even provide emotional support of any kind to the victims. Today the focus seems to be more on the individuals who escaped and the “foreign company” rather than the painstakingly slow judicial system and corrupt and inefficient administration.
As far as compensation to victims of the tragedy is concerned, the case was settled “out of court.” There is no point in demanding extra money. Some middlemen in Bhopal must be licking their lips over possibility of more compensation by drawing parallels with the recent devastating oil spill in the Gulf of Mexico. The claims against the British energy major BP Plc. for the lives lost off the Louisiana coast could be mind-boggling sum by Indian standards. The prospect has made some people raise the racial case in India. It is not American life versus Indian life as made out by a few commentators. India accepted the settlement over the disaster that happened 25 years ago. The worst part is the demand made in some circles that Dow Chemicals, which has taken over Union Carbide, bear the liabilities to the tune of billions of rupees for clearing the ground of the toxic material. Why not make them pay higher compensation to victims, say a few activists. The company is vilified for its predecessor’s fault. These kinds of demands only make India a laughing stock at the international level.
The CEO or senior executives of the multinationals are easy targets especially if they are whites and Americans. The chairman and managing director (CMD) of Indian Petrochemicals Corporation Limited (IPCL — then a public sector organization but now part of Reliance Industries) remained unpunished for the deaths of 30 odd people when the gas cracker burst at Nagothane near Mumbai in November 1990. Again four people were killed at the same complex in June 2008. Did any one ask Mukesh Ambani — the CEO of the Reliance Industries — to be punished? Did we demand jailing of the CMD of Indian Oil (IOC) for fire tragedies in the past? Whether one heads a foreign company or Indian, CEOs cannot be held responsible for industrial disasters or even for accidents like the Mangalore plane crash.
At best the CEO of a company or the minister may offer to resign. He or she may even be asked to leave, citing “moral responsibility” which means little to victims. The CEOs should be judged on the basis of what they do after such disasters. I worked for 15 years in the hydrocarbon industry and would like to warn that safety is everyone’s responsibility — the companies which operate these units, the people who reside around such dangerous plants and the local administration. Everyone must know what to do in case of accidents and gas leakages.
No company on earth can give 100 percent safety guarantee regarding its operations. If some companies do, you believe them at your peril. The situation is far more complicated especially in chemical industries that play with fire and sometimes with human lives.
http://arabnews.com/world/article67833.ece

Indian Budget: NRI's Out, FIIs In

http://www.thehindubusinessline.com/2010/03/02/stories/2010030250870400.htm

NRIs out, FIIs in
Gopal Sutar
India's 2010-2011 Budget described as the common man's budget by the Finance Minister, Mr Pranab Mukherjee, has little to offer to non-resident Indians (NRIs).
However, he seems to have done them a favour by not levying any taxes on the non-resident external rupee (NRE) and the foreign currency non- resident (FCNR) deposits.
These deposits continue to remain tax-free but they are no more attractive as they used to be.
Food inflation
The food inflation, a big cause for concern for the ruling dispensation, is bound to exacerbate with rise in motor fuels that came into effect immediately after the Budget was presented.
The NRE and FCNR terms deposits have now become extremely unattractive as the interest earned on them is less than three per cent as against the food inflation touching 17 per cent last month.
NRIs
The NRIs, especially the Gulf Indians, who regularly send money to their dependants, will find the going tough because of this mismatch.
ATF price rise impact
On the other hand, flying to and from India too will be costlier since a service tax of 10.36 per cent will now be levied on domestic flights and the economy class of foreign ones.
This is in addition to the proposed rise in aviation turbine fuel by Rs 1,500 a kilolitre.
The air travellers will feel the pinch when they take to flights within and outside India.
The Budget also proposes to tax interest, royalty and fees for technical services received by the NRIs even if such payments do not relate to a place of business/business connection in India or if the services are rendered outside India.
As far as Indian rupee (INR) is concerned, Mr Mukherjee intends to formalise a symbol that reflects and captures the Indian ethos and culture.
The idea is to ensure pride of place to the rupee alongside the select club of currencies such as the US dollar, British pound sterling, euro and the Japanese yen that have a clear and distinguishing identity. With the expectation of Indian growth going forward, the rupee is expected to be firm.
Some foreign fund managers have described the Budget as forward looking.
The foreign institutional investors (FIIs) are likely pump in more money into India to cash in on the strong growth prospects as Europe and America are yet to recover completely from the global financial crisis.
FIIS investment
Just on the day of the Budget and as it was being presented, the FIIs pumped in nearly Rs 900 crore, the highest single session intake recorded by National Stock Exchange (NSE).
If this FII trend continues in future, it would result in strengthening of the rupee which might not be to the liking of the NRIs.
The author is Deputy General Manager (Corporate Communications/PR), ITI Ltd, Doorvaningar, Bangalore.
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