RBI ups key rates, loans won't get costlier for now

In a bid to tighten money supply and curb rising prices, the Reserve Bank of India on Tuesday hiked benchmark rates by 25 basis points each in the monetary policy for 2010-11. However, the good news for borrowers is that this may not lead to an immediate increase in loan rates, though there will certainly be an "upward bias". "Whatever has been done in the policy has reduced the supply. So definitely there is an upward bias in rates. As credit demand increases, there will be a demand-supply gap, and then there is a possibility of interest rates going up," SBI chairman OP Bhatt said. ICICI Bank MD Chanda Kochhar expressed a similar view, saying ‘‘During the year I do see the lending rates going up, but I don’t see any immediate impact on rates as of now.’’ HDFC Bank MD Aditya Puri said lending rates would depend on the demand for funds. ‘‘We do not see any significant change in rates in the near term,’’ he said.

Should gambling in India be legalized?

Beyond the raging controversy over the finances and ownership of IPL teams, there are long-standing murmurs of betting and match fixing in cricket. Betting is banned in India, but that has not stopped people from indulging in it. Would it not make sense to legalize it? Prohibition never stopped people from drinking — it just made some of the alcohol unsafe. In fact, what a ban does is to drive such activity under ground, with criminal elements, terrorists and the drug mafia all getting involved. Legalizing betting and other forms of gambling would minimize the underworld's role by bringing this activity into the open. The government would also be able to raise revenues through taxation. Some might say the social consequences of gambling -- stories of men gambling away their family's savings -- make it not worth the risk. But if there are regulations in place, this possibility too would be minimized. Should betting and gambling, therefore, be made a legitimate, regulated tax-paying business?

Cos plan 15% hike in pay

It's that time of the year again. While traffic on Job Street is picking up, the decibels on the annual increments are getting louder. After a year of salary freeze and pay cuts, companies are looking to fatten the wallets of their employees — albeit more moderately than the heydays of 2006-07. The performers, however, have nothing to worry about. A dip-stick survey by TOI revealed that headhunters are projecting up to a 15% hike in salaries in India Inc this fiscal. Besides the hikes, here are a few other trends that would stand out. MNCs are no longer the preferred paymasters since the growth story has now taken a desi turn. The wide-eyed obsession of Indian white collar workers for MNCs is a thing of past and the focus is now on domestic companies. And the performers are not going to lose out in the year of the turnaround. Says Sandeep Chaudhary, leader of Hewitts Performance and Rewards Consulting practice in India: ‘‘The growth drivers are domestic consumption and investment. Since the domestic market is insulated from global downturn, it is less volatile. Organisations across all sectors in this field are looking at better salary increase projections for 2010, when compared to actuals of 2009.'' According to a TeamLease survey, the services sector is providing a fillip to salary growth with an average 6% growth, contrasted with the rather low, sub-5% salary growth average for the manufacturing sector. Telecommunication, healthcare and IT in that order have been driving this growth. Energy, automobile and allied and FMCD in that order are the only manufacturing sector industries to drive salary growth at 5% plus levels. A survey by Hewitt Associates also projects salary hikes for 2010 in India at 10.6%, the highest in Asia-Pacific and up 60% from the actual increase of 6.6% in 2009. It further adds that Indian-owned companies are expected to outperform MNCs with a projected average increase of 11.4% as against a 10.2% by the latter. E Balaji, CEO, Ma Foi Management Consultants, also swears by the 10%-plus hike. ‘‘Salaries are likely to be slightly above the 10% mark.”

Industry grows at over 15% in Feb

NEW DELHI: Industrial growth maintained the high growth rate of over 15% for the third month in a row in February. Industrial growth, as measured by the index of industrial production (IIP), however, was slightly lower than around 16% of the previous month and 17.6% in December. The high growth is largely due to a strong 16% growth in manufacturing and a low base of 0.2% a year ago, when the Indian economy was still reeling under the impact of the global financial crisis. Consumer durable, which was particularly hit by the global crisis, expanded 29.9% in February while capital goods production rose 44.4%. Among other sectors, mining rose 12.2% and electricity by 6.7%. For the first 11 months of the last fiscal, industrial output rose by 10.1% against 3% a year ago. As many as 14 out of the 17 industrial groups showed positive growth in February. This would help the Indian economy to grow by at least 7.2% as estimated by the Central Statistical Organisation (CSO).

Sachin and the art of magic

Finally, Sachin Tendulkar’s dream sequence came to an end on Tuesday night: he himself would have heaved a sigh of relief after returning to the dugout with nothing more than 11 runs in his kitty.
After all, the way he is batting it almost looks unreal. For most of his fans, of course, it is as close to magic as it can get; but then, don’t we all know that there is not even a thin line between magic and illusion.
The amazing part is that Sachin is batting like the good old times; if anything, in fact, he seems to have gone one level higher now. Instead of blazing all the way, like he used to, he pulls out the big shots only as a weapon of surprise.
Otherwise, he is happy playing the edges, nudges and, quite often, even the second fiddle; the booming drives too have quietly made way for well-timed, well-directed hits. He doesn’t try to convert good deliveries into bad anymore; they come along anyway.
Most importantly, unlike earlier, his innings doesn’t end abruptly, just when he seems to be racing towards a crescendo: this is probably the one critical difference between the Sachin of yore and the Sachin of today. Truly, experience and age have their virtues.
Despite his meager contribution against Kings XI, Sachin would be delighted though: after all, Mumbai Indians won yet again, romping to their sixth triumph. At this stage, all the think-tanks must be wondering how to stop him and his team.
After all, they do look invincible. With Shikhar Dhawan willing to take the attack to the opposition, and Sachin playing the mentor, they have the most effective opening pair here. With Tiwari, Rayudu, Bravo and Pollard to follow, they also have the firepower to go for broke.
Harbhajan Singh, of course, is there with his own brand of batting in times of crises. The only question is: can they sustain it? Especially, when runs dry up from Sachin’s bat.
MI, however, look even more imposing when you look at their bowling: Zaheer. Malinga. Harbhajan. There is experience and variety here. Add Bravo and McLaren and they seem to have an answer for everything.
Only one team matches them in terms of personnel: Royal Challengers. Kallis, Pandey and Uthappa have been in superlative form with the bat; Steyn, Praveen and Vinay have been equally potent with the ball. With the arrival of Pietersen, they appear even more formidable.
But just when you thought the battle was getting thicker at the top, they went and lost to Dhoni’s Super Kings. Caught in a Vijay blitzkrieg, they capitulated easily to open up the table completely. Everybody seems to be in the race again, apart from the luckless Kings XI of course.
Clearly, the IPL has slipped into its most exciting phase; as the teams get their final reinforcements, the contests will only become sharper and tighter.

Generation Next

India, the world's fastest growing mobile phone market, is on its way to revolutionising its telecom sector. Auction of spectrum for 3G services is a first for the country, and the response last Friday didn't belie expectations. First day, first show saw 12 per cent higher bids than the fixed base price of Rs 3,500 crore. Nine bidders put on the table a total of Rs 12,000 crore, and that's already one-third the officially projected revenue haul of around Rs 35,000 crore. Cash inflow, it seems, may eventually exceed the government's target. Though a very dynamic sector, telecom has yet long been dogged by controversies. Opacity and arbitrariness marked the now-stalled grant of 2G spectrum. The specially designed 3G sale model India's first online auction monitored by auctioneers and telecom authorities provides a welcome contrast. The multi-phase bidding process aims at boosting revenue, allowing for stage-by-stage price escalation based on surplus demand. It's also geared to avoiding cartelisation by bidders. With the world watching India handle one of its most exciting technological makeovers, the bar has rightly been set high on transparency. If our growth story is to remain credible globally, all remnants of a licence-permit approach to business have to be swept away. The government's stakes are high. India's yawning fiscal deficit has to be trimmed to 5.5 per cent of GDP in 2010-11. Revenue from sale of 3G and, subsequently, broadband wireless access will come in handy. Fiscal consolidation plans are also to be buoyed by disinvestment proceeds, and a follow-on public offer in SAIL is the latest big news on that front. The government must continue mobilising resources through reform and modernisation which have multiplier effects on the economy. More so, since its social sector spending will increase with the upcoming food security law. For consumers, 3G's high-end applications will take cellphone use to the next level. High-speed internet, video streaming, calling and conferencing, TV viewing, online movies and games, content download, data sharing and transfer: all of this and more can be facilitated on the 3G platform. Important social and economic benefits will accrue, when 3G-enabled mobile services are geared to health and literacy, dissemination of market information for, say, farmers or banking and other financial transactions. On their part, companies may expect good returns on investment, going by a TRAI report that 150 million cellphone users had subscribed to data and internet services by end-2009. That indicates the kind of demand out there. At the end of the day, however, 3G will be as transformative as its price tag allows it to be. It'll be good for everybody if competition among operators ensures affordability.

Man who inspired Bill Gates dies

Dr. Henry Edward Roberts, a developer of an early personal computer that inspired Bill Gates to found Microsoft, died on Thursday in Georgia. He was 68. Roberts, whose build-it-yourself kit concentrated thousands of dollars worth of computer capability in an affordable package, inspired Bill Gates and his childhood friend Paul Allen to come up with Microsoft in 1975 after they saw an article about the MITS Altair 8800 in Popular Electronics. Roberts, an ex-military man, later went on to careers as a farmer and a physician, but continued to keep up with computer advances: He recently told Gates he hoped to work with new, nanotechnology-enhanced machines, according to son David Roberts. “He did think it was pretty neat, some of the stuff they’re doing with the processors,” said David Roberts, who confirmed Gates rushed to Georgia on Friday to be with his mentor. Roberts died in a Macon hospital after a long bout with pneumonia, according to his family. “Ed was willing to take a chance on us — two young guys interested in computers long before they were commonplace — and we have always been grateful to him,” Gates and Allen said in a joint statement. “The day our first untested software worked on his Altair was the start of a lot of great things. We will always have many fond memories of working with Ed."