Bangalore: For India’s top technology firms focused on the markets of US and Europe, the country’s $15-billion-plus domestic market for IT services is the latest battleground. In a year when top markets for software exports are recovering and expected to grow at less than 5%, India’s domestic market for IT is set to grow three times faster, mainly on the back of higher government spending on IT and new outsourcing projects from local banks.
“We will be looking at IT to aid customer acquisition and financial inclusion. The attempt will be to take banking to remote areas using technology services,” says Pushpinder Singh, DGM-IT, Bank of India , which plans to spend Rs 600 crore on technology this year. “For some of the contracts, we will continue with existing vendors. We will be evaluating others for new projects,” he added.
Indian government departments and public sector units are going to spend the most on IT this year. The biggest driver for higher government spending on IT and related areas is India’s UID project, which according to CLSA Research will lead to $10 billion worth of investments in IT consulting, system integration, and computer hardware over the next five to six years. CLSA sees an $1-billion business opportunity for consultants in the first five years and a need to raise manpower by 15% for their services. Some 18,000 systems specialists and programmers will drive a $2.4-billion pie for integration of UID into existing software systems.
“As this sets in, business process re-engineering (BPR) activities should pick up, as the full benefits of UID for businesses become clear. We expect 36,000 people to join the BPR wave around UID, creating a $6-billion market over the first five years,” CLSA researchers said in their report last year.
“Apart from UID, IT hardware growth will get a fillip with $1.1 billion worth of equipment sold to the government and another $1.8 billion of incremental demand from the private sector and government-owned companies,” the report adds. What’s critical is that vendors like IBM, TCS, Infosys and Wipro see newer opportunities emerging even during a global slowdown in software spending because state-owned enterprises like BSNL and ONGC — and other ministries too — seek to become more efficient.
Experts tracking this sector say India Post, Indian Railways and LIC will spend $3 billion on information technology this year, and the government’s share of total IT spend in India will cross 10% over the next two years from 6% right now. Praveen Bhadada, manager-consulting, Zinnov Management Consulting says: “In the 10th five-year-plan (2002- 2007) 0.3% was spent on IT. In the 11th five-year-plan, IT spend increased to 0.5 %. If we extrapolate this, government is going to spend about 2 % on IT. If today, $1.5 billion is spent annually, it could easily go up to $ 7-8 billion over the next three to five years.”
For one, India’s department of posts (DoP) is set to spend up to $1 billion on its IT-led business revamp over the next five years with top tech firms like IBM, TCS, Infosys and Wipro pursuing several outsourcing contracts for helping the postal department automate and integrate its business processes with a standard software solution. Accenture is in the process of developing a plan for this revamp.
Success in my Habit
Tuesday, March 8, 2011
Fortis buys hospital in Singapore for S$33 mn
Singapore: Seven months after pulling out of the race for Singapore’s Parkway, Fortis Healthcare, India’s second-largest hospital chain, on Thursday announced its first venture in the city-state, with a S$33-million (about Rs 118 crore) acquisition of an under-construction specialised cancer hospital.
Fortis Global Healthcare that handles the international business interests of promoters Malvinder Mohan Singh and Shivinder Mohan Singh, acquired the facility from Singapore-listed realty company First Real Estate Investment Trust, thereby completing three acquisitions in the last five months. The construction of the hospital is expected to be complete by the second quarter of 2012.
In November 2010, Fortis Global Healthcare had acquired Hong Kong-based primary healthcare network Quality Healthcare and in January this year, picked up a 30 per cent stake in Australia’s largest dentistry network, Dental Corporation. “Through this hospital, we are making a beginning in the highly recognised and competent healthcare delivery system of Singapore. Our group incorporates more than 25 years of experience in healthcare delivery and this hospital will benefit from that experience, to meet patient expectations in Singapore. We will continue to look for opportunities to further expand our presence in the region,” Fortis Global Healthcare Executive Chairman Malvinder Singh said in a statement.
Although the under-construction facility was valued at S$28.2 million at the end of last year, Fortis will be paying 17 per cent, or S$4.8 million, more for the property and will develop it into a specialty oncology and surgical hospital, with new generation critical and intensive care services. The acquisition also caps Fortis Healthcare’s extended struggle to establish a proper footprint in Singapore, dubbed as a hub for its plans of creating an integrated healthcare delivery system in Asia and Australia region.
Last July, Fortis was engaged with Malaysian state investor Khazanah in a takeover battle for Singapore-listed hospital operator Parkway, but finally backed out after about two months of wrangling over the asset. Subsequently, though, Fortis had said that it would look for a real estate investment trust or secondary listing on the Singapore stock exchange.
Fortis Global Healthcare that handles the international business interests of promoters Malvinder Mohan Singh and Shivinder Mohan Singh, acquired the facility from Singapore-listed realty company First Real Estate Investment Trust, thereby completing three acquisitions in the last five months. The construction of the hospital is expected to be complete by the second quarter of 2012.
In November 2010, Fortis Global Healthcare had acquired Hong Kong-based primary healthcare network Quality Healthcare and in January this year, picked up a 30 per cent stake in Australia’s largest dentistry network, Dental Corporation. “Through this hospital, we are making a beginning in the highly recognised and competent healthcare delivery system of Singapore. Our group incorporates more than 25 years of experience in healthcare delivery and this hospital will benefit from that experience, to meet patient expectations in Singapore. We will continue to look for opportunities to further expand our presence in the region,” Fortis Global Healthcare Executive Chairman Malvinder Singh said in a statement.
Although the under-construction facility was valued at S$28.2 million at the end of last year, Fortis will be paying 17 per cent, or S$4.8 million, more for the property and will develop it into a specialty oncology and surgical hospital, with new generation critical and intensive care services. The acquisition also caps Fortis Healthcare’s extended struggle to establish a proper footprint in Singapore, dubbed as a hub for its plans of creating an integrated healthcare delivery system in Asia and Australia region.
Last July, Fortis was engaged with Malaysian state investor Khazanah in a takeover battle for Singapore-listed hospital operator Parkway, but finally backed out after about two months of wrangling over the asset. Subsequently, though, Fortis had said that it would look for a real estate investment trust or secondary listing on the Singapore stock exchange.
Exports from SEZs rise 47% in Apr-Dec
New Delhi: Exports from special economic zones (SEZs) stood at at Rs 2,23,132 crore in the April-December 2010 period, a rise of 47 per cent, compared with Rs 1,51,785 crore in the same period of the last financial year, according to data released by the Export Promotion Council for export-oriented units (EOUs) and SEZs.
So far, the government has approved 582 SEZs, of which, 374 have been notified. Currently, a total of 130 SEZs are under operation and these contribute to exports from these zones. As on December 31, 2010, the total investment in SEZs stood at Rs 1,95,348 crore, according to the data. During 2009-10, total exports from SEZs stood at over Rs 2,20,711 crore. Exports from EOUs and SEZs account for 36 per cent of the country’s total exports.
Although exports from SEZs have been rising steadily, the ministry of commerce and industry had expressed concerns over the sustainability of such a growth rate, especially with the introduction of the Direct Taxes Code. The draft DTC bill has suggested the continuation of the 15-year tax holiday for units which would be operational on or before March 31, 2014.
So far, the government has approved 582 SEZs, of which, 374 have been notified. Currently, a total of 130 SEZs are under operation and these contribute to exports from these zones. As on December 31, 2010, the total investment in SEZs stood at Rs 1,95,348 crore, according to the data. During 2009-10, total exports from SEZs stood at over Rs 2,20,711 crore. Exports from EOUs and SEZs account for 36 per cent of the country’s total exports.
Although exports from SEZs have been rising steadily, the ministry of commerce and industry had expressed concerns over the sustainability of such a growth rate, especially with the introduction of the Direct Taxes Code. The draft DTC bill has suggested the continuation of the 15-year tax holiday for units which would be operational on or before March 31, 2014.
Economy grows 8.2% in Q3 on good agri show
New Delhi: Indian economy expAnded 8.2% in the third quarter of the current financial year on the back of robust growth in agriculture and services sectors . The growth number was in line with expectations, but lower than 8.9% growth recorded in the previous two quarters, government data showed.
Farm output grew 8.9% over the year-ago period, boosted by strong monsoon rains, while the manufacturing sector experienced a slowdown at 5.6%. The decline in investments, which grew 5.99% in the quarter compared with 17.84% in the previous quarter, remained a concern.
Farm output grew 8.9% over the year-ago period, boosted by strong monsoon rains, while the manufacturing sector experienced a slowdown at 5.6%. The decline in investments, which grew 5.99% in the quarter compared with 17.84% in the previous quarter, remained a concern.
Core sector output rises 7.1% in Jan
New Delhi: The output of the country’s six core infrastructure industries grew 7.1 per cent in January, on the back of healthy production of crude oil, petroleum refinery products and electricity.
The six core sectors — crude oil, petroleum refinery products, coal, electricity, cement and finished steel — had expanded by 9.8 per cent in the same month last year.
In December 2010, the output of these infrastructure industries rose by 6.1 per cent. The six core industries account for 26.68 per cent of the country’s total industrial output. Petroleum refinery and crude oil output grew by 8.7 per cent and 10.8 per cent respectively in January, up from 3.8 per cent and 9.8 per cent in the same period last year, a statement released by the Ministry of Commerce and Industry showed.
Electricity generation grew by a healthy 9.3 per cent, compared to 6.4 per cent growth in the corresponding month last year, the data said. However, coal output dropped by 1.2 per cent as against 5.4 per cent expansion during the same month last year.
The six core sectors — crude oil, petroleum refinery products, coal, electricity, cement and finished steel — had expanded by 9.8 per cent in the same month last year.
In December 2010, the output of these infrastructure industries rose by 6.1 per cent. The six core industries account for 26.68 per cent of the country’s total industrial output. Petroleum refinery and crude oil output grew by 8.7 per cent and 10.8 per cent respectively in January, up from 3.8 per cent and 9.8 per cent in the same period last year, a statement released by the Ministry of Commerce and Industry showed.
Electricity generation grew by a healthy 9.3 per cent, compared to 6.4 per cent growth in the corresponding month last year, the data said. However, coal output dropped by 1.2 per cent as against 5.4 per cent expansion during the same month last year.
India in top 10 manufacturers list
New Delhi: India was amongst the top 10 manufacturers in 2010 and together with Brazil and China accounted for a third of the world manufacturing output, up from one-fifth 10 years ago, said a United Nations report .
"India is listed as one of the top 10 manufacturers of the world in 2010," the international yearbook of industrial statistics 2011, published by the United Nations Industrial Development Organisation (UNIDO) said.
India along with other leading developing economies such as Brazil and China showed strong performance in economic growth in 2010 and the manufacturing value added of all these countries grew by over 10% last year, the agency said.
The share of these three countries in world manufacturing output reached 32% compared to 20% 10 years ago, the report, released in Vienna on Thursday, added.
World manufacturing value added, or MVA, rose 5.3% in 2010, as per the agency's estimate.
The MVA of industrialised countries was up 3.4% in 2010.
India topped developing countries (excluding China) in production of textiles, chemical products, basic metals, general machinery and equipment, and electrical machinery.
It overtook Brazil in the production of motor vehicles and now ranks second among developing countries after Mexico.
However, its Asian competitors Thailand, Malaysia and the Philippines are ahead in the production of electronic goods such as computers and office equipment, radio, television and other communication equipment.
"India is listed as one of the top 10 manufacturers of the world in 2010," the international yearbook of industrial statistics 2011, published by the United Nations Industrial Development Organisation (UNIDO) said.
India along with other leading developing economies such as Brazil and China showed strong performance in economic growth in 2010 and the manufacturing value added of all these countries grew by over 10% last year, the agency said.
The share of these three countries in world manufacturing output reached 32% compared to 20% 10 years ago, the report, released in Vienna on Thursday, added.
World manufacturing value added, or MVA, rose 5.3% in 2010, as per the agency's estimate.
The MVA of industrialised countries was up 3.4% in 2010.
India topped developing countries (excluding China) in production of textiles, chemical products, basic metals, general machinery and equipment, and electrical machinery.
It overtook Brazil in the production of motor vehicles and now ranks second among developing countries after Mexico.
However, its Asian competitors Thailand, Malaysia and the Philippines are ahead in the production of electronic goods such as computers and office equipment, radio, television and other communication equipment.
Ameya Pawar becomes the first Indian-American to be elected to Chicago City Council
New Delhi: Ameya Pawar has become the first Indian-American to be elected to Chicago City Council. He has been elected as the alderman for the 47th Ward on Chicago's North Side.
Thirty year old Pawar won with 50 per cent of the vote. Pawar has committed to donate US$ 50,000 of his salary to address the city's deficit or offer community grants, and has promised to have an elected ward council to guide his actions at City Hall.
Pawar said, "We have a lot of issues that we have to work through. But it's what you do in the private sector, non-profit sector when you have problems or issues, you bring in new eyes to a set of problems and you work on them together."
Pawar, the son of Indian immigrants, said he stands on the shoulders of other prominent Indian Americans as well as his parents and grandparents. He is an emergency preparedness expert working on his third master's degree.
Thirty year old Pawar won with 50 per cent of the vote. Pawar has committed to donate US$ 50,000 of his salary to address the city's deficit or offer community grants, and has promised to have an elected ward council to guide his actions at City Hall.
Pawar said, "We have a lot of issues that we have to work through. But it's what you do in the private sector, non-profit sector when you have problems or issues, you bring in new eyes to a set of problems and you work on them together."
Pawar, the son of Indian immigrants, said he stands on the shoulders of other prominent Indian Americans as well as his parents and grandparents. He is an emergency preparedness expert working on his third master's degree.
Indian-American trade expert appointed to key US export committee
New Delhi: Chiradeep Sengupta, an eminent Indian-American trade expert, has been appointed to an important US export committee to provide "invaluable" advice on exports. Sengupta of Federal Express will be responsible for providing his advice on the export control reform initiative of the Obama administration, which targets doubling the country's exports in five years.
Commerce Secretary Gary Locke appointed Sengupta as a member to the President's Export Council Subcommittee on Export Administration (PECSEA), which will advise the commerce department on the administration's export control reform initiative.
Locke said, "The PECSEA will provide invaluable advice as we continue to enhance our national security through the President's reform efforts."
PECSEA was chartered by the department of commerce to advise it on US policies encouraging trade with all countries with which the United States had diplomatic or trading relations, as well as of policies governing trade for national security, foreign policy and short supply reasons
Commerce Secretary Gary Locke appointed Sengupta as a member to the President's Export Council Subcommittee on Export Administration (PECSEA), which will advise the commerce department on the administration's export control reform initiative.
Locke said, "The PECSEA will provide invaluable advice as we continue to enhance our national security through the President's reform efforts."
PECSEA was chartered by the department of commerce to advise it on US policies encouraging trade with all countries with which the United States had diplomatic or trading relations, as well as of policies governing trade for national security, foreign policy and short supply reasons
CCI gets power to approve big M&As
New Delhi: The Competition Commission of India will now be able to vet and approve big mergers and acquisitions in the country, with the government notifying the key provisions of the Competition Act on Friday.
The provisions, Sections 5 and 6, would grant the competition watchdog the powers to scrutinise amalgamation proposals of companies with a threshold of 1,500 crore. The CCI would take a maximum of 180 days to vet mergers.
Corporate affairs secretary DK Mittal, however, clarified that this would not cover mergers in the banking sector once the Banking Amendment Bill gets passed in Parliament. The Banking Amendment Bill, which proposes to keep banking sector M&As out of the purview of the Competition Commission of India (CCI), was passed by the cabinet on Thursday and will be placed before Parliament in this session.
CCI chairman Dhanendra Kumar told ET that the watchdog expects to clear all such M&A proposals as quickly as possible. "This would immensely help M&A activity in the country as there will be a legal certainty and ensure accelerated growth in the economy," he said.
Kumar said he expected only 40-50 such proposals as it would be looking at acquisitions with combined assets of 1,000 crore or more, or combined turnover of 3,000 crore or more.
Further, the target company's net assets have to be a minimum of 200 crore or turnover of 600 crore to attaract CCI's intervention.
The provisions, Sections 5 and 6, would grant the competition watchdog the powers to scrutinise amalgamation proposals of companies with a threshold of 1,500 crore. The CCI would take a maximum of 180 days to vet mergers.
Corporate affairs secretary DK Mittal, however, clarified that this would not cover mergers in the banking sector once the Banking Amendment Bill gets passed in Parliament. The Banking Amendment Bill, which proposes to keep banking sector M&As out of the purview of the Competition Commission of India (CCI), was passed by the cabinet on Thursday and will be placed before Parliament in this session.
CCI chairman Dhanendra Kumar told ET that the watchdog expects to clear all such M&A proposals as quickly as possible. "This would immensely help M&A activity in the country as there will be a legal certainty and ensure accelerated growth in the economy," he said.
Kumar said he expected only 40-50 such proposals as it would be looking at acquisitions with combined assets of 1,000 crore or more, or combined turnover of 3,000 crore or more.
Further, the target company's net assets have to be a minimum of 200 crore or turnover of 600 crore to attaract CCI's intervention.
FM allows foreign access, gives MFs reason to smile
Mumbai: The Indian mutual fund industry, reeling under strict regulatory norms related to commissions and disclosures, has finally got a reason to smile. Finance Minister Pranab Mukherjee, while presenting the Union Budget 2011-12, has allowed fund houses to tap foreign nationals for investing in equity schemes.
“To liberalise the portfolio investment route, it has been decided to permit Sebi-registered mutual funds to accept subscriptions from foreign investors who meet the KYC (Know Your Customer) requirements for equity schemes,” Mukherjee said while presenting the Budget in Parliament. “This would enable Indian mutual funds to have a direct access to foreign investors and widen the class of foreign investors in the Indian equity market, he added.
It is widely believed that the move would lead to a lot of mid-sized foreign funds and wealthy individuals looking at the Indian equity market more seriously. According to the current norms, foreign investors need to first register with the Securities and Exchange Board of India (Sebi) before investing in the domestic equity markets. As a result, mid-sized and smaller funds which did not have a significant India allocation chose alternative investment avenues, including offshore funds and participatory notes (PNs). Going forward, they just need to comply with the KYC norms and start investing.
Experts feel the government’s initiative could prove to be a “game-changer” for the Indian fund industry, as this would pave the way for large global investors to invest directly into mutual fund schemes.
“To liberalise the portfolio investment route, it has been decided to permit Sebi-registered mutual funds to accept subscriptions from foreign investors who meet the KYC (Know Your Customer) requirements for equity schemes,” Mukherjee said while presenting the Budget in Parliament. “This would enable Indian mutual funds to have a direct access to foreign investors and widen the class of foreign investors in the Indian equity market, he added.
It is widely believed that the move would lead to a lot of mid-sized foreign funds and wealthy individuals looking at the Indian equity market more seriously. According to the current norms, foreign investors need to first register with the Securities and Exchange Board of India (Sebi) before investing in the domestic equity markets. As a result, mid-sized and smaller funds which did not have a significant India allocation chose alternative investment avenues, including offshore funds and participatory notes (PNs). Going forward, they just need to comply with the KYC norms and start investing.
Experts feel the government’s initiative could prove to be a “game-changer” for the Indian fund industry, as this would pave the way for large global investors to invest directly into mutual fund schemes.
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