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Business In India

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Autor:  anton  27 December 2010
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01/09/2007 ۞ 08/09/2007

Josй Ricardo de Almeida Rodrigues


“…A Нndia nгo se lamenta. Como poderб ter pena se jб nгo lhe resta nada do que foi? Este й o traзo mais budista de toda a Нndia. Aceita-se a perda desde que se nasce. Vive-se feliz. Envelhece-se sem sofrer pelo que se perdeu. A Нndia й um reino de antуnimos, cruel e emocionada, viciosa e virtuosa, inerte e inquieta, dolente e divertida, que nos agonia e que nos apaixona. E que nos faz voltar. Sempre…”

Luнs Mieiro

List of frequently used abbreviations

BOT Build Operate Transfer

BPO Business Process Outsourcing

FDI Foreign Direct Investment

FII Foreign Institutional Investor

GATT General Agreement on Tariffs and Trade

GDM Global Delivery Model

GDP Gross Domestic Product

GDR Global Depository Receipts

HTP Hardware Technology Park

IRDA Insurance Regulatory and Development Authority

IT Information Technology

ITA Information Technology Agreement

ITES IT Enabled Services

KPO Knowledge Process Outsourcing

LIC Life Insurance Corporation

METROS Top 8 Cities in the Country

MNC Multinational Corporation

NBFC Non-Banking Financial Company

NBFI Non-Banking Financial Institutions

PPP Purchasing Power Parity

PSB Public Sector Bank

PSU Public Sector Unit

RBI Reserve Bank of India

REMF Real Estate Mutual Funds

Rs Indian Rupee

SBU Strategic Business Units

SDR Special Drawing Rights

SEBI Securities and Exchange Board of India

SEZ Special Economic Zone

SEZA Special Economic Zones Act, 2005

SLA Service Level Agreement

STP Software Technology Park

STT Securities Transaction Tax

TIER 1 CITIES Next Level Cities after Metros

TRAI The Telecom Regulatory Authority of India

VAT Value Added Tax

VCF Venture Capital Funds

WTO World Trade Organisation


Visit to Bannerghatta National Park

Bannerghatta National Park is situated 22 km south of Bangalore, Karnataka, India. The journey to the park takes nearly half an hour from Bangalore. This hilly place is the home for one of the richest natural, zoological reserves. The 25,000-acre (101 kmІ) zoological park makes this a major tourist attraction of Bangalore.

The Bannerghatta Tiger and Lion Reserve have a reserve of Indian tigers, lions and other mammals. A mini safari here helps to fund the reserve. The Tiger Reserve of the park has been recognised by the Forest Department of India.


Visit to Holy Trinity Church

The beauty of Holy Trinity Church is not alone in its tall tower and unparalleled pillars but also in its high-class statues, of generals and other officials, mural tablets and memorials inside. The Holy Trinity Church is certainly a massive and majestic piece of architectural grandeur. The decorative memorials and articles inside are “history in stone” that speaks the stories of great men and women. If one goes to the tower of the Church one can admire the strength of the structure, the solidarity of the wooden ladders and the view of the beautiful city of Bangalore. We learnt that the Cross which surmounts, it was the present by the Queen Victoria's Own West Kent Regiment. “In memory of those who died whilst this Unit was in Bangalore” (1928-32). Many of the older monuments were also made in London by famous firms, the most beautiful being the one of the young Soldier in full uniform, in memory of Lieut. Augustus Croft Dobree, who died in 1867, aged 22. There was also another wall monument of Gen. Clement Delves Hill, clad in the garments of ancient Rome, who died on January 20th, 1845 by the Gersoppa Falls. His brother was a famous commander of the peninsular war. Another monument To Arabella, the wife of Lt. Gen. Sir James Wolfe Murray had full Latin stanzas from Virgil inscribed on it. Some told of tragic occurrences. Maj. Gen. Faunce was lost when, after the campaign in Burma, his vessel was found in the Bay of Bengal, and in the same month his wife died on her voyage to England. Their married daughter died in Tellicherry a few weeks later. There are many more tablets and memorials which speak about the great people who toiled and equipped this House of God. The stained glass, which depicts the baptism of Jesus in splendid colour, is a rare piece;

The three pairs of angels, which are carved in wood of the roof, which is above the Choir pews and the altar, symbolises the angels guarding the Holy of Holies. Indeed it is a marvellous workmanship.

The Church seems to have had a useful but uneventful life. The congregation naturally changed from year to year and the various monuments on the walls and pillars of the Church record the goings and comings of the regiments. Through the testimony of the Rev. Edmund Bull, who died in 1950, there is a tradition that The Rt. Humble Winston Churchill (former Prime Minister of England) lived in this parish and doubtless, attended the Church with the Fourth Hussars, who were stationed in Bangalore at the end of the last Century. During the two world wars, when Bangalore was a great Centre for the Army, there was a very large congregation. The Rev. Geo. J. Howard reports that during the last war, the Army made good use of the Church and among the regiments, which paraded there and worshipped within the walls were the 1st Royal Norfolk Regiment, the 1st Wiltshire Regiment, the 2nd Welsh Regiment and the 13th Jungle Field Artillery. There were 41 Chaplains who rendered their services to this church till 1947. The marriage registers and the baptism registers were maintained very neatly and still the Karnataka Central Diocese (C.S.I) preserves them.

Extract from the 140 Year Celebrations Brochure, Courtesy - Mr. S. Sadanandam

Bangalore City Visit and Exploration by oneself

Synonymous with the IT revolution in India, Bangalore or Bengaluru is the capital of the state of Karnataka in India. With a population of approximately of 6.8 million (2006), Bangalore is India's third-largest city. The sylvan surroundings of Bangalore are sure to soothe your weary nerves. Bangalore has earned the sobriquets "Silicon Valley of India", " Pub Capital of India”, and “City of Gardens” among others. With its beautiful parks, avenues, multiplexes and historical monuments, Bangalore is undoubtedly bubbling with life and energy.


Marketing Challenges in India.

Challenges of branding in India.

Prof. S. Ramesh Kumar

Doing Business in India.

Dr. Hieronimus (Mico-Bosch)

Prof. Rajeev Gorda (IIMB)

Prof. R T Krishnan (IIMB)

Population (as per 2001 census ): 1028 million, Males: 532 million, Females: 496 million.

Density of population (as per 2001 census): 324 persons per square kilometre.

Life expectancy at birth (2006 est.) , Males: 63.9 years, Females: 66.91 years

Literacy rate: 64.84 per cent , Males: 75.26 per cent, Females: 53.67 per cent.

Over the last decade, the Indian Gross Domestic Product (GDP) has registered an average growth of 6%. Per capita income has increased at about the same rate for the last five years. According to a World Bank survey, India ranks fourth in terms of Purchasing Power Parity (PPP), next only to the USA, China and Japan.

Contributing to 10% of the GDP and with a market size of $210 billion, the Indian retail sector is growing at a healthy pace of 5% p.a.

The share of the organised sector in retail trade is currently a mere 3% and is expected to reach 9% -10% by 2010, indicating a huge opportunity for prospective new players.

India is home to the youngest population in the world - where half are under the age of 25. This growing working population in India leads to an increasing demand for lifestyle products and services.

A rapid urbanisation has increased the population classified as middle-class to 300 million, which is receptive to new retail formats and demands more merchandise on the shelves.

The Indian government has recently proposed various investment incentives. The liberalised economic regime and interest shown by global companies suggest that this strategy is succeeding and that no global player can afford to ignore India any more.

Value Added Tax (VAT) was rolled out in April 2005. The VAT regime has brought all retailers into the tax loop and made seamless trade possible for organised retailers.

Indian retail industry is ranked among the ten largest retail markets in the world. The attitudinal shift of the Indian consumer in terms of “Choice Preference”, “Value for Money” and the emergence of organised retail formats have transformed the face of retailing in India.

Current scenario: The Indian retail industry is currently estimated to be valued at US$ 200 billion. Organised Retailing comprises 3 per cent (or) US$6.4 billion of the retail industry. With a growth of over 20 per cent per annum over the last 5 years, organised retailing is projected to reach US$ 23 billion by 2010.

Drivers of Retail Growth: The Indian retail growth can be attributed to the following factors:

· Demography dynamics: Approximately 60 per cent of the Indian population is below 30 years of age.

· Double incomes: Increasing instances of double incomes in most families coupled with the rise in spending power.

· Plastic revolution: Increasing use of credit cards for categories relating to apparel, consumer durable goods, food and grocery etc.

Top players: The Indian retail industry though predominantly fragmented through the owner run “ mom and pop outlets” has been witnessing the emergence of a few medium-sized Indian retail chains.

Potential for investment: The total estimated investment opportunity in the retail sector is around US$ 5-6 billion in the next five years .

Location: With modern retail formats having made their foray into the top cities namely Hyderabad, Coimbatore, Ahmedabad, Mumbai, Pune, Chennai, Bangalore, Delhi , Nagpur There exists tremendous potential in tier two towns over the next 5 years.

Sectors with high growth potential: Certain segments that promise high growth are: · Food and grocery · Clothing · Furniture and fixtures · Pharmacy · Durables, footwear & leather, watch & jewellery.

Fastest growing formats: Some of the formats that offer good growth potential are: · Speciality and super market · Hyper market · Discount stores · Department stores · Convenience stores and e-retailing.

Supply chain infrastructure: Supply chain infrastructure in terms of cold chain and logistics.

Rural retail: Retail sector offers opportunities for exploration and investment in rural areas, with corporates and entrepreneurs having made a foray in the past.

Foreign Direct Investment (FDI) to the extent of 100 per cent in Cash and Carry Wholesale formats. Franchisee arrangements are also permitted in retail trade.

Single brand products: FDI upto 51 per cent is permissible in the retail trade of single brand products subject to the following conditions. · Products to be sold should be of a “single brand” only. · Products should be sold under the same brand internationally. · “Single brand” product-retailing would cover only products which are branded during manufacturing.

The benefits of modern trade are several. The most obvious benefits can be classified under People, Purpose and Processes as elaborated below:


The impact of a modern trade on peoples’ lives in India is probably the most important of all:

- It will provide training and jobs for the Indian population

- It will act as a school for social promotion in this country

- International teams in Indian retail companies can cross-fertilise know-how and culture.

As for the consumer, new more efficient stores would change people’s lives:

- Lower price inflation

- Better product quality

- Increased choice

- Greater convenience


A robust modern trade sector in India will drive the economy by:

- Reaching out to smaller towns and the more under-developed parts of the country

- Encouraging the growth, trust and effectiveness of local brands and their export to other countries through local sourcing hubs

- Helping develop other areas of the economy, for example construction, security, facility management businesses, materials handling, logistics and transportation services, storage equipment, packaging, food processing etc., with a multiplier impact on the economy

- Boosting entrepreneurship, cross fertilisation and business innovation


Modern trade sector will contribute to:

- India’s infrastructure, which will develop faster to match the sophisticated supply chains needed by bigger stores

- By re-structuring and eliminating multiple layers of intermediaries, cost cutting can be achieved throughout the supply chain

- Retailing is a system run business with huge amounts of data that needs processing. India’s competency in IT will contribute to the quick assimilation and implementation of new technologies such as RFID (Radio Frequency Identification).


Indian Software Industry

BPO Industry

Business analytics – Nature of Work, Systems and Processes

Prof. Sourav Mukherji

Indian Economy and its performance after liberalization.

Factors contributing to the growth of Indian economy.

Prof. Shyamal Roy

Business process outsourcing (BPO) is not a new management strategy, but has received heightened interest in the past several years because of its potential economic and strategic impact.

Companies look to outsourcers to provide process efficiencies and economies of scale, as well as continued investment in the latest technology, which can be more effectively cost-justified when spread across multiple organizations.

The growth of BPO in India can be classified into four distinct phases:

The First Wave: Company Owned Units Pioneered BPO in India

Company owned units such as American Express, General Electric (GE), Citibank, and AOL etc. triggered the trend of outsourcing back office operations and call centre services to India.

Since then several banks, insurance companies, airlines and manufacturing companies have set up back office service centers in India.

The Second Wave: Venture Funded New Companies

Over the last few years, a number of experienced professionals have set up start-up operations in India. Generally such start-ups have been funded by venture capital funds.

The Third Wave: Leading IT Services Companies enter BPO

Given the magnitude of such opportunity, natural synergies with the software services business and the ability to leverage their high-end physical infrastructure and management band-width, most large IT services companies have ventured into ITES.

Consolidation of the market with the smaller players merging with each other/ larger companies for economies of scale.

The Fourth Wave: Domain / Industry Specialized BPO’s

Niche players in industry verticals or specific business processes have setup BPO businesses. Many of these players have had vast experience in the domestic market and are now offering offshore BPO services.

Generalized large BPO players are now focusing on “verticalizing” their competencies and structures.

The changes are all-encompassing, driven by key participants of the BPO sector - service-providers, clients, employees, external stakeholders and the Government.

The supplier-side of the global offshoring market is anticipated to become more competitive in light of the emerging preference for presence in offshore as well as near-shore locations. Canada and Ireland, traditionally perceived as high-cost locations, will emerge as strong contenders.

The structure of the Indian offshoring industry is witnessing steady change, with the emergence of domain/industry specialized BPO’s. A noticeable change in the service offerings of service-providers is

being witnessed; service providers are migrating to higher-end strategic processes. Correspondingly, the traditional growth drivers of the industry (voice, data processing), will lose focus.

The objective of offshoring has progressed from being a mere cost-saving initiative to one that is adopted for realizing process improvements, and enhancing efficiencies. This shift has resulted in maturing of the client-vendor relationship, to a partnership based approach.

Service-providers are realizing that the traditional sources of cost advantages - manpower and infrastructure costs, may no longer be sustainable. Service-providers have initiated significant cost-control and reduction initiatives, such as efficient utilization of capacity, accurate cost planning techniques, training on cost consciousness, to meet the challenge.

Service providers are diversifying their geographic bases, by creating new infrastructure in Tier II cities, in order to leverage the lower costs and lower attrition rates, as well as to find access to a larger talent base. This also helps service providers to better equip themselves from a contingency perspective.

The BOT model of deal-structuring has been cited as an emerging area of preference for clients, due to lower risks with higher control, and for service providers, due to higher levels of profit margins.

Pricing models are being centered on achievement of SLA’s, indicating movement away from the raditional fixed price model.

Migration strategies, risks and costs are increasingly becoming the area of focus for employee attrition, service-providers are aiming to reposition the BPO industry as a long-term career option. In addition, the focus has shifted to ensuring that the recruitment processes are aligned with retention strategies, by utilizing competency based frameworks for recruitment.

Following the success of BPO, organizations gradually began to look upon India as more than just a hub for English-speaking warmbodies. India is known to export world-class manpower that has become an integral part

of the business fabric in global markets. Further, the resurgence in growth of its domestic economy is being attributed to knowledge sectors such as IT, pharma etc. Clearly, India is a gold mine for higher levels of skill, knowledge and experience extending across varied functions and industries. On the basis of these competitive

advantages, supported by cost-arbitrage opportunities, India gradually began to emerge as an offshore hub for knowledge services. Knowledge Process Offshoring (KPO) was on its way in. A key driver on the demand side is the changing demographics. A key concern in Western Countries is the ageing population. By contrast, the median age in India is 24 years.

KPO is not a mere extension of BPO. Its philosophy, objective and service delivery mechanism sets it apart significantly. The core essence of KPO, we believe is not about delegating or sending away processes in order to focus on core competencies. In fact, the premise of KPO is to include into a global delivery team, the required skills that support and guide strategies for an organization’s core processes. Therefore where BPO seeks to exclude processes (i.e. send them away), KPO seeks to include talent. The “inclusive” philosophy of KPO is driven by the global availability of skills and the simultaneous diffusion and aggregation of knowledge across multiple geographies. Cost-reduction is an additional benefit that organizations happen to derive from

including talented people from lower cost geographies. Access to domain knowledge is undoubtedly the key driver for KPO.

Visit The Art of Living

The Art of Living Foundation, established by His Holiness Sri Sri Ravi Shankar in 1981, is a unique global service project that formulates and implements lasting solutions to conflicts and issues faced by individuals, communities and nations. One of the largest volunteer-based organizations in the world, the foundations work has touched more than 300 million people spanning over 140 countries.

Reminding us that diverse traditions and cultures have their roots in the same basic human values of peace, compassion, truth, belongingness and non-violence, the foundation has been serving society with a non-denominational, secular and holistic approach.

The Art of Living initiatives strive to uphold the dignity of every human being on this planet, offering each individual a stress-free mind, a healthy body and the opportunity to maximize their potential for personal and spiritual growth.


Human Challenges and issues in Indian software industry.

Prof. Narendra M Agrawal

Corporate Governance in India

Prof. N Balasubramanian

Managing Challenges of Growth.

Mr. Sanjiv Shishoo (Novo Nordisk)

Mr. Naresh Palta (Hindustan Aero. Limited)

Mr. Ajay Kela and Mr. C Mahalingam (Symphony Services)

With employee turnover in the Indian offshoring sector ranging over 40%, it is not surprising to find attrition being cited as one of the main causes of concern for the BPO industry. It has attracted the attention of the top management of both clients and service-providers, who are now viewing this as an area of strategic importance,

rather than an operational issue.

Although the respondents to the survey agree to average attrition statistics ranging between 40% and 60% for the industry as a whole, the actual company rates may vary based on regional presence, functional offerings and even process offering within specific functions. For instance a few respondents state that their centers in Tier II cities such as Jaipur, Managalore, Coimbatore and Chandigarh witness a lower degree of turnover as compared to metros. Reasons cited for this include the psychographic profile of the residents or could be simply because of the lower density of offshoring setups in the city. Other trends that service-providers highlighted include attrition rates being higher in voice-based processes vis-а-vis non-voice based processes and declining attrition rates as processes move up the value chain within functional offerings.

Explaining attrition is often challenging, in light of the innumerable causative variables - behavioural, organizational and industrial - which may be involved. This challenge is magnified in the offshoring industry on account of the absence of any historical industry precedence compounded with the typical demographic profile of the employees, often in their early twenties. However, respondents to the survey identify three prime reasons to explain the high-attrition phenomenon, which include perceived lack of growth opportunities in the organization, migration to more stable work environments and most importantly, search for higher pay-scales.

Employee Retention Strategies:

- Clearly defined career paths

- Tie-ups with educational institutes for post graduation programs subsidized by the service-provider

- Informal anti-poach agreements with competitors

- Cross functional training

- Performance-linked remuneration

- Tenure-linked bonuses

- Recognition schemes

- Flexible working hours

The respondents stated that the most far reaching yet implicit strategy being adopted by service providers is that of repositioning the BPO industry as an attractive long-term career option, so far considered a “stop-gap” solution to fresh graduates – the target employee segment. A majority of the respondents have taken proactive measures such as detailing career growth plans for employees and communicating the intent to potential candidates through campus road shows and employment fairs. However, service-providers assert that for the image takeover of the industry to fructify, solitary efforts are inadequate, requiring the industry to collectively make compelling efforts in this area. In their individual capacity however, service-providers are striving to reinforce the power of their brand, an important pull factor for employees of the industry. Mid-sized industry respondents state that in a considerable number of cases their employees chose to move to global or large Indian service-providers, resulting in a high degree of ‘brand-switching’within the industry itself.

In the same light, the intent of getting a majority of organizations to develop an informal “no poaching” agreement is another retention strategy being deliberated, requiring collaborative effort of the industry. However industry experts agree that a more viable model in the short-term is the signing of bilateral agreements

between companies, as industry-wide agreements may require a longer time frame to materialize. All respondents cite the requirement of organizations to adopt responsible behaviour in order to ensure that the industry does not become a victim of its own actions.

In keeping with the strategy of positioning the BPO industry as a serious career option, service-providers have entered into exclusive tie-ups with educational institutes to provide professional degree courses to their employees. This allows employees to pursue their academic interests and simultaneously remain employed.

In addition, performance-linked remuneration, transparent recognition schemes, cross-training etc. are other practices being adopted a majority of the survey respondents. Although constrained by time-zone differences, a few respondents state that they try to accommodate flexible working hours wherever possible, aiming to minimize the outflow to sectors such as retailing and hospitality, which compete for similar skill-sets.

Recruitment Strategies:

- Use of competency frameworks

- Hiring from the higher-age bracket of population.

In addition to pursuing innovative retention strategies, respondents state that the focus is steadily shifting to ensuring that recruitment processes are aligned with retention strategies. The effectiveness of any system depends on the quality of the inputs, in this case the new employees. A few respondents to the survey have realized this, and correspondingly made a paradigm shift in their hiring process by focusing on competency frameworks and other selection instruments. In some cases, respondents highlight that clients take an active

interest in the recruitment process, clearly identifying profiles and positions. This is especially true for BOT models, wherein the client is preparing to take over all assets – human and physical after a pre-defined period.

In addition, an interesting strategy being adopted by a few respondents includes recruiting employees belonging to an older age bracket, for want of a higher degree of employee stability and commitment.

It is estimated that, by the year 2008, India would have approximately five million people employed by the ITES industry. In order to ensure a consistent flow of trained manpower in the future, the industry is exploring the possibility of working with the government to introduce courses at a school and college level, in line with the requirements of the ITES-BPO industry of India.

Although service providers are focusing on recruitment and retention of skilled manpower, steps are also being taken to reduce the adverse impact of attrition on business continuity through building robust processes especially with respect to data security, reducing dependency on individuals by making relationships and processes system-driven rather than person-driven, increasing back-up bench strength and investing in adequate succession planning.

Offshoring poses significant cultural and change management challenges, which companies today cannot afford to overlook. Engaging the work force to ensure success requires aligning all levels, functions and businesses with the strategic outsourcing vision and gaining a collective commitment to the vision. Most companies

realize the importance of the task but require support to translate the knowledge into action.

Offshoring strategies create a fundamental shift in the human resources models and force organizations to reassess and actively manage their human assets. The shift can take place at two levels:

- Roles retained in-house with increased/changed responsibilities

- Changed roles with new characteristics, skills and expertise relevant to both inhouse and offshore centers

Respondents cite that clients are becoming increasingly concerned of the risks of inadequately planned change management initiatives, which they believe result in lowering of staff morale, productivity and service quality.

To mitigate change management risks, respondents state that in many cases, the client’s senior management has begun to assume the role of evangelists, winning over resistance by clearly communicating, to all key stakeholders, the strategic payoffs from outsourcing. In addition, the management takes initiatives to sensitize employees to the new paradigm and helps them ease into it by clearly outlining the new structures, work processes, roles and responsibilities well in advance. The areas on which employees are sensitized include working in remotely-enabled business environments and cultural issues.

A few leading respondents state, that in specificsituations they have provided advisory inputs to their clients on issues relating to change management. For instance, service providers have conducted workshops and seminars to stress the requirement of executive commitment at the highest level and have highlighted the leadership on the strategic importance of offshoring initiatives from a change management perspective.

In addition to the above, respondents cite the following aspects which are typically addressed in change management initiatives:

- Timely, honest and consistent internal and external communication plans

- Two-way cultural orientation, identification of discrepancies and similarities among corporate cultures

- Retention strategies for key personnel and contractors

- Compensation to the retained organization for successful operation of the offshore center

- Cross training, job rotation and job mobility programs

- SLA’s between onshore and offshore operations

Nearshore facilities allow service-providers to assist clients in change management, by absorbing a part of the displaced workforce. A trend which service providers are observing is the timely action being taken by clients with respect to change management. They state that as soon as the decision to offshore has been taken; organizations identify affected roles, positions and individuals - an activity traditionally left to the last stages of the project. For employees to be retained in-house, new rolesare clearly defined and integrated into a performance management system. This includes developing a comprehensive change management process and ongoing tools for evaluation and monitoring. For instance, a respondent cited the example of an Application Engineer’s role changing from primary involvement in technology development to vendor management of an outsourced contract. The client took timely action to not only address the change in the employee’s job description, but also on the related aspects of the compensation structure, HR metrics and required training and development to ensure continued productivity.

Given the increased participation of various functions in the offshoring process and their mounting importance, respondents state that it is becoming crucial to establish appropriate governance structures, not only for the program itself, but for the ongoing management and oversight of offshored operations.


Social Entrepreneurship: Political Reforms in India.

Prof. Trilochan Sastri

Turnaround of Indian Railways

Prof. Anand Sharma

Mr. Sudhir Kumar.

Political Profile:

Government type: India is a Sovereign Socialist Secular Democratic Republic with a Parliamentary system of Government.

Administrative divisions: Twenty-nine States and six Union Territories.

Constitution: The Constitution of India came into force on 26th January 1950.

Executive : The President of India is the Head of State. The Prime Minister is the Head of the Government and runs office with the support of the Council of Ministers who form the Cabinet.

Legislative: The Federal Legislature comprises the Lok Sabha (House of the People) and the Rajya Sabha (Council of States) together forming the Houses of the Parliament.

Judiciary: The Supreme Court of India is the apex body of the Indian judicial system, followed by High Courts and Subordinate Courts.

Advantage India:

Progressive movement towards delicensing and deregulation.

India is the world's largest democracy.

Economic and political stability.

The Gross Domestic Product grew by over 9 per cent in the first half of 2006-07.

Large pool of young skilled labour force, cost effective production facilities, large domestic market.

Capacity up gradation in infrastructure, industrial base and intellectual capital.

Progressive tax reforms.

Progressive opening of the economy to Foreign Direct Investment.

Portfolio investment regime liberalised.

Liberal policy on technology collaboration.

Investor friendly policies.

Acceleration of the privatisation process and restructuring of public enterprises.

Good network of research and development.

Railway budget:

The railway budget focuses on several measures to give a thrust to Indian Railways. The key indicators of the performance of Indian Railways are as follows:

Over the four years period from 2003-04 to 2007-08, surplus has increased from Rs 8.8 billion to a budget figure of Rs 114.5 billion, couple with an increase in net revenues from Rs 41.48 billion to a budget figure Rs 160.22 billion. During the same period, passenger revenues should increase by 49% and freight traffic earnings should increase by 73%.

During the first nine months of 2006-07, freight earnings and gross traffic earnings have increased by 17%, whereas passenger earnings have increased by 14% and other coaching earnings have increased by 48%.

The net revenue to capital ratio has reached a historic level of 20%. Operating ratio expected to be 78.7%.

Cash surplus before dividend has increased from 147 billion in 2005-06 70 Rs 200 billion in 2006-07.

The Key budget proposals are as follow:

The outlay for 2007-08 would be Rs 310 billion, marking an increase in the plan outlay by 32%, which would be sourced from general revenues, internal generation or extra budgetary resources.

Passenger fare rates would be reduced in the range of 4% to 8%. Freight rates for key items such as petroleum and iron are would be reduced in the range of 5% to 6%.

800 more coaches and 32 new trains would be introduced.

Investment of Rs 300 billions would be made in freight lines (including 3-storey freight containers) and construction of freight corridor stations.

High-speed passenger corridors equipped with state-of-the-art signalling and train control systems for running high-speed trains, New Electric Works and Wagon Bogie Complex would be introduced.

CP and IR- Similarities

Structure- Nationalized Railway

More than 150 year old

Member of UIC (International Union of Railways)

Different Gauges- Meter Gauge in northern part of Portugal

Daily Run of Indian Railways

Number of Trains 16,021

Number of Passengers carried 14.84 million

Revenue Earning Freight carried 1.53 million tonnes

Number of Freight Trains 6,465

Number of Employees 1.5 million

IR- Challenges

Catering to growing demand of booming economy

Investment hungry-large funds needed for repair, renewals and replacement

Need for heavy investment for expansion and modernization

Keeping abreast with IT and transport technology advancement

Competition from low fare Airlines

Big, Complex, Government –run organization with Accountability to Public and Parliament

Marketing Initiatives- Strategy:

Low Tariff Better Quality of Service

Online Reservation

Online Status

Inquiry ‘139’ In All Cities

Call Centres

Using Banks, ATM, Post Offices Network

Advance Reservation, TATKAL

Advance Unreserved Tickets

Scheme on the Lines of Airlines – Frequent Flier

IR introduced Passenger Computerization in 80’s

Budget Hotels – Private Partnership

Catering – Separate Corporate Entity

Special Trains, Coaches

Know Your Train

Operating Initiatives

Strategy - Play on Volumes

Marginal Cost of Additional - Traffic is Very Low

Increase the Lead, Increase the Load

Increase the Carrying Capacity of Wagons + 6 Tons

Triple Load of Containers

Private Operators Allowed to Run Container Trains

Regain the Traffic from Road


New Air Conditioned Coaches with More Seating Capacity at Lower Fare

Stations Development on Pattern of Airports

Dedicated Freight Corridor

Dedicated Passenger Corridor for High Speed Passenger Intercity Trains

Manufacturing Units with Private Capital

Logistic Parks with Private Capital


Cash Surplus of 4.97 Bn

Operating Ratio 99.39% - 78.7%

No Down Sizing as Suggested by Rakesh Mohan Committee

No Increase in Freight and Fares (Rather Reduction was Announced in the Rail Budget)

Visit to Infosys

Infosys Technologies Ltd. (NASDAQ: INFY) provides consulting and IT services to clients globally - as partners to conceptualize and realize technology driven business transformation initiatives. With over 75,000 employees worldwide, we use a low-risk Global Delivery Model (GDM) to accelerate schedules with a high degree of time and cost predictability.

As one of the pioneers in strategic offshore outsourcing of software services, Infosys has leveraged the global trend of offshore outsourcing. Even as many software outsourcing companies were blamed for diverting global jobs to cheaper offshore outsourcing destinations like India and China, Infosys was recently applauded by Wired magazine for its unique offshore outsourcing strategy — it singled out Infosys for turning the outsourcing myth around and bringing jobs back to the US.

Infosys provides end-to-end business solutions that leverage technology. We provide solutions for a dynamic environment where business and technology strategies converge. Our approach focuses on new ways of business combining IT innovation and adoption while also leveraging an organization's current IT assets. We work with large global corporations and new generation technology companies - to build new products or services and to implement prudent business and technology strategies in today's dynamic digital environment.


India’s Financial Sector: Banking, Insurance and Stock Markets.

India’s Financial System

Prof. Ashok Thampy (IIMB)

Regulatory Framework of Indian Banking

Head Risk Solution and Research (HP India)

Dr. S Sachidananda

Indian Banking Sector

Prof. P C Narayan (IIMB)

Capital Markets in India

Prof. Ashok Thampy

Mr. M K Ananda Kumar (Executive Director BSE)

The Indian financial sector is in for an overhaul. Financial sector reforms have long been regarded as an integral part of the overall policy reforms in India. India has recognised that these reforms are imperative for increasing the efficiency of resource mobilisation and allocation in the economy and for the overall macroeconomic stability. The reforms have been driven by a thrust towards liberalisation and several initiatives such as liberalisation in the interest rate and reserve requirements have been taken on this front. At the same time, the government has emphasised on stronger regulation aimed at strengthening prudential norms, transparency and supervision to mitigate the possibilities of systemic risks. Today the Indian financial structure is inherently strong, functionally diverse, efficient and globally competitive.

Reserve Bank of India

The Reserve Bank of India (RBI), established in 1935, is the central bank of the country. Its role is four-fold:

- Regulate and supervise the Indian financial system;

- Formulate, implement and monitor the monetary policy of the country;

- Manage the country's foreign exchange reserves and prescribe exchange control norms to facilitate external trade and payment; and

- Act as banker to the Central and State Governments.

RBI, through its policies, directives and guidelines, has been placing increasing emphasis on the monitoring of and provisioning for non-performing assets, capital adequacy and risk management.

Types of Institutions

The banking system in India comprises scheduled commercial banks, urban and state cooperative banks and regional rural banks. Scheduled commercial banks, in turn, can be categorised into public sector banks, private sector banks and foreign banks. Besides banks, another segment of players in the Indian financial system, are non-banking financial companies (NBFCs).

Public Sector Banks

This segment comprises 28 banks, including the State Bank of India and its seven subsidiary banks. It is the dominant segment in the banking industry. The central government is the majority shareholder, holding more than 51% equity stake in all the public sector banks, although its shareholding has decreased over the years on account of public offerings of shares and return of equity capital to the Government by these banks.

Private Sector Banks

This segment comprises 28 banks, including seven new private sector banks and 21 old private sector banks. The new private sector banks are growing rapidly in size.

The last couple of years have witnessed some mergers and acquisitions in this segment, and this trend is expected to gain in strength in the years to come. The RBI has placed restrictions on shareholding in private sector banks and no shareholder can hold more than 5% shareholding in a private sector bank.

Foreign Banks

This segment comprises 29 banks, including most of the leading international banks, although their presence is restricted to the metropolitan and large cities. Currently, there are several restrictions on foreign banks with respect to the expansion of branch network, location of new branches, acquisition of shareholding in Indian banks, etc. However, recently, RBI has come out with a road map for deregulation of foreign banks, whereby from 2009, a foreign bank would be on par with an Indian bank, and can freely compete with other Indian banks, carry out mergers and acquisitions, etc.

Cooperative Banks and Regional Rural Banks

Cooperative banks cater to the credit needs of specific communities or groups of people in a region and operate in both urban and rural areas. They have been established under the respective State Co-operative Societies Acts, and are administered by the state authorities, although their banking activities come within the purview of RBI. Regional rural banks were established under an act of the Parliament with a view to improving credit delivery in rural areas.

Non-Banking Financial Institutions (NBFIs)

NBFIs offer enhanced equity and risk-based products. They play a crucial role in broadening access to financial services and enhancing competition and diversification of the financial sector. The NBFI segment comprises all-India financial institutions, state-level financial institutions, NBFCs and primary dealers. The first two are government-owned and focus on long-term development financing; NBFCs are mostly private sector entities that provide niche financial services; and primary dealers play an important role in the primary and secondary government securities market.


Prior to the reforms in 1991, India's banking system was almost entirely owned by the government, except for about 22 private sector banks and foreign banks. The reforms of 1991 led to the banking system's movement from a totally administered sector into a more market driven one. The entry of new private sector banks has brought increased competition, though public sector banks (PSBs) still continue to dominate the banking system.

There are 94 scheduled commercial banks which account for around 68,000 branches with total asset size of US$ 530 billion.

Regulatory scenario

The Ministry of Finance is responsible for the policies of the financial system. RBI regulates the banking system, NBFCs and key financial institutions.

The Banking Regulation Act, 1949; RBI Act, 1934; and Companies Act, 1956 are the governing regulations in this sector.

In private sector banks, foreign equity upto 74% is allowed under the automatic route including FII investments (upto a maximum of 49%) and NRI investment (upto a maximum of 24%).

Recent developments and industry outlook

RBI has announced norms for the ownership of foreign banks in Indian private sector banks. A roadmap for the presence of foreign banks in India has been announced and from 2005-09, foreign banks are permitted to set up wholly-owned subsidiaries in India.

With a view to provide banks additional options for raising capital funds, to meet both the increasing business requirements as well as the Basel II requirements, Indian and foreign banks have been allowed to augment their capital funds by the issue of certain hybrid instruments.

All commercial banks are expected to implement Basel II norms with effect from March 31, 2007.

From April 2009, RBI proposes to accord full national treatment to wholly-owned subsidiaries of foreign banks.

Capital Markets

The Indian capital markets have witnessed a transformation over the last decade and India is now placed among the mature markets of the world.

Regulatory scenario

SEBI was established as a statutory body in 1992 to:

- regulate and promote development of the securities market and protect the interest of small retail investors;

- regulate the functioning of capital markets and issue detailed guidelines concerning capital markets,disclosures by public companies and investor protection; and

- formulate regulations to govern various intermediaries and also regulate the mutual fund industry, investments by FIIs and venture capital investments.

Dealings in securities are also governed by the provisions of The Securities Contracts (Regulation) Act, 1956.

Mutual Funds

The entry of private sector funds in 1993 has given the Indian retail/corporate investor a wider choice of fund families.

In 2005 - 06, overall assets under management grew by 55% to US$ 33.2 billion at March 2006. A total of 190 new schemes were launched during the year as against 97 in the previous year. The dominance of the private sector has increased from 32.89% in 2001 to 78.28% in March 2006.

SEBI recently issued broad guidelines permitting real estate mutual funds (REMFs).

Foreign Institutional Investors

India has, of late, generated a high level of interest among FIIs on account of its deep and liquid stock market and relatively high returns generated by it. Total investment by FIIs increased from US$ 35.93 billion to US$ 45.11 billion during 2005 - 06. The number of FIIs registered with SEBI increased from 540 in March 2004 to 685 in March 2005 and 882 in March 2006.

Venture Capital Funds (VCF)

VCF visibility has increased over last couple of years with several large funds looking actively at investments in India. VCFs and private equity investors invested an estimated US$ 1.1 billion in 66 India-based companies in 2004. At March 2006, there were 80 VCFs and 45 foreign VCFs registered in India.


The insurance industry in India was traditionally the domain of government-owned insurance behemoths such as the Life Insurance Corporation (LIC) in the life insurance segment, and the General Insurance Corporation and the Export Credit and Guarantee Corporation in the non-life insurance segment. In August 2000, the insurance sector was opened up to private participation and since then, 15 new life insurance companies and 11 new general insurance companies have entered the market as joint ventures with major global insurance companies.

During 2005-06, life insurance companies underwrote a first year premium of US$ 8 billion, representing a 41% growth over the previous year. During the year 35.46 million policies were underwritten. In the non-life insurance, the total gross premium income during 2005-06 was US$ 4.67 billion, a 16.13% increase over the previous year.

LIC dominates the life insurance sector with a market share of 71% during 2005-06. The performance of private sector players has been robust and their market share in premium has increased to 29% in 2005-06 compared with 22% in 2004-05. In non-life insurance, the share of private insurers has increased to 26.6% in 2005-06 compared with 20.2% in 2004-05.

Regulatory scenario

The Insurance Regulatory and Development Authority (IRDA) regulates the insurance and reinsurance business in India.

FDI (including FII and NRI investments) of upto 26% is allowed under the automatic route subject to obtaining license from IRDA.

Recent developments and industry outlook

There has been an intention to increase FDI in the sector from 26% to 49%. However, this policy initiative has been stalled on account of opposition from certain political parties.

A committee set up by IRDA for examining the feasibility of setting of 'Standalone Health Insurance Companies' has recommended an increase in the FDI limit in such companies upto 49% and a reduction in minimum capital requirements to US$ 5.56 million (equivalent of Rs 250 million) from the current limit of US$ 22.2 million (equivalent of Rs 1 billion) applicable to any insurance company.

IRDA has issued a roadmap for time bound de-tariffing of the general insurance industry. The roadmap specifies December 31, 2006 as the proposed date for the discontinuation of tariffs.

Visit to Kartanaka Renewable Energy Development Ltd.

(A Government of Karnataka Enterprise)

Karnataka Renewable Energy Development Ltd. (KREDL) is an organization devoted entirely to the promotion of non-conventional energy sources in Karnataka. Our aim is to promote projects for harnessing energy from wind, small-hydro, biomass, solar energy and energy recovery from wastes through private investment. The company advises the Government of Karnataka on policies to be adopted for ensuring a systematic and balanced growth of projects for harnessing renewable energy sources.

Any source of energy that gets replenished naturally and does not suffer permanent depletion due to use can be called renewable sources of energy. Examples of renewable energy sources are the sun, wind, water flowing in rivers and streams, ocean tides, forests, vegetation etc.

Electrical Energy has come to stay as one of the important inputs of development. The per capita consumption which was about 150 units in the sixties now stands at about 325 units. The demand for electrical energy is growing rapidly at 8 to 9% annually.


Visit to AirTel

Bharti Airtel

Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group, has a diverse business portfolio and has created global brands in the telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully launched an international venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA, world leader in financial protection and wealth management.

Airtel comes to you from Bharti Airtel Limited, India’s largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - mobile services, broadband & telephone services (B&T) & enterprise services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the B&T business offers broadband & telephone services in 94 cities. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. All these services are provided under the Airtel brand.

Business Divisions

Mobile Services: Bharti Airtel offers GSM mobile services in all the 23-telecom circles of India and is the largest mobile service provider in the country, based on the number of customers.

Broadband and Telephone Services: The group offers high speed broadband internet with a best in class network. With Landline services in 94 cities we help you stay in touch with your friends & family and the world.

Enterprise Services (Corporates): The group focuses on delivering telecommunications services as an integrated offering including mobile, broadband & telephone, national and international long distance and data connectivity services to corporate, small and medium scale enterprises.

Enterprise Services (Carrier Services): The Company compliments its mobile and broadband & telephone services with national and international long distance services. It has over 35,016 route kilometers of optic fibre on its national long distance network. For international connectivity to east, it has a submarine cable landing station at. For international connectivity to the west, the Company is a member of the South East Asia-Middle East-Western Europe – 4 (SEA-ME-WE-4) consortium along with 15 other global telecom operators.


Airtel was born free, a force unleashed into the market with a relentless and unwavering determination to succeed. A spirit charged with energy, creativity and a team driven “to seize the day” with an ambition to become the most globally admired telecom service. Airtel, after just ten years, has risen to the pinnacle of achievement.

As India's leading telecommunications company Airtel brand has played the role as a major catalyst in India's reforms, contributing to its economic resurgence.

Today we touch peoples lives with our Mobile services, Broadband services, to connecting India's leading 1000+ corporates. We also connect Indians living in USA with our callhome service.

Vision & Promise

By 2010 Airtel will be the most admired brand in India:

- Loved by more customers

- Targeted by top talent

- Benchmarked by more businesses

“We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more”

List of Sources and Website References

1. Cultural Dimension and MNC Brands: A Study in the Indian Context – Ramesh Kumar S. and Bajaj Karan

2. Branding Strategies in Changing Marketing Environment – Indian Context - Ramesh Kumar S.

3. Financial Market Evolution and Globalization

4. Indian Financial System – Narshimhan, M. S.

5. Complementary and Continuous Innovation: Case of the Indian Software Industry – Sourav Mukherji and J. Ramachandran

6. Leadership Challenges in Indian Software Industry – Narendra M Agrawal, Ramesh Narayanaswamy, Rashie Ratam and Renuka Devi

7. Human Resources Issues, Challenges and Strategies in the Indian Software Industry - Narendra M Agrawal and Thite Mohan

8. Nature and Importance of Soft Skills for Software Project Leaders - Narendra M Agrawal and Thite Mohan

9. Managing Knowledge Workers: Benchmarking Indian IT Organization - Narendra M Agrawal

10. Development Human Capital for Sustaining the Growth of Indian Software Industry - Narendra M Agrawal and M R Rao

11. Tax and Business Guide – Doing Business in India – Ernest&Young

12. India Budget 2007 – Ernest&Young

13. Dynamic Business Partner: Investor Friendly Destination - Investment & Technology Promotion Division,

Ministry of External Affairs, Government of India.

14. Global Integration through Knowledge Process Offshoring - PriceWaterhouseCoopers

15. The Evolution of BPO in India – PriceWaterhouseCoopers

16. The Rising Elephant – Benefits of Modern Trade to India Economy - PriceWaterhouseCoopers

17. Bannerghatta National Park

18. Holy Trinity Church

19. Bangalore City

20. Art of Living Org.

21. Infosys

22. Karnataka Renewable Energy Development, Ltd.

23. AirTel

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