Economist’s Economist

Dr. Suresh Tendulkar who was the former chairman of the Prime Minister’s Economic advisory council passed away recently in Pune. Dr. Tendulkar joined Prime Minister Manmohan Singh’s team when Dr. C Rangarajan the current chairman moved to the Rajya Sabha in 2008.

I am taking this opportunity to point out the contribution of Dr. Tendulkar to the growth of the Indian economy. Dr. Tendulkar has undertaken extensive research in the dynamics of the Indian Economy. He will be remembered for his research work on the 1991 crises that hit the Indian Economy and his follow up on research on the post liberalization of the Indian Economy.

I had the opportunity to interact with Dr. Tedulkar while I was working with the Confederation of Indian Industry (CII) in Bangalore. Dr. Tendulkar who is soft spoken, shy of the lime light and self effacing taught economics at the Delhi School of Economics. Dr. Tendulkar not only taught his students the foundation of economics but also the value system of precision and rationale thinking.

Dr. Tendulkar has done extensive research on poverty estimation and economic reforms. Dr. Suresh was of the earlier supporters of the Government’s decision to go for the liberalization of the Indian economy. He believed in the liberalization of the Indian economy and felt that this would lead to market expansion and freeing the various kinds of controls and barriers will help in the Indian economy from integrating with the global one. Dr. Tendulkar was also of the view that liberalization would unleash the market forces and it would have a direct bearing on the reduction of income distribution in India.

In 2009 Tendulkar headed a committee which came out with a method to calculate poverty in the country. The normal method of calculating poverty in India was by measuring the calorie intake in India. But the new method adopted by Dr. Tendulkar also included spending on Food, Education and health. As per the estimate based on the new Tendulkar model 37.5 % of the population is under the poverty line compared to the Government of India’s percentage of 27.5 %. This new method has raised a lot of debates among the economists within the country. This conclusion also raised doubts on the notion that India’s liberalization policy, has it really helped India’s poor to move out of poverty.

Dr. Tendulkar was an ardent supporter of the economic reforms that was shaping the new India. Tendulkar authored many books in support of economic liberalization and globalization. Noticeable among them were ‘Reintegrating India with the Global economy’ and ‘Understanding Reforms’.

Dr. Tendulkar contributed to the Disinvestment process of Public Sector Enterprises ( PSE’s) in the country . Dr. Tendulkar was part of the first Disinvestment committee in 1996 which was set up to advice the government on the disinvestment process.

Dr. Tendulkar has studied in depth the post economic reforms in India especially the growth patterns after two decades of reforms. He has done a statistical analysis of the growth story in the country. Planning Commission of India has often taken his advice on policy matters pertaining to economic growth policies.

Dr. Tendulkar was simple in all the demeanors. His love for scooters is worth mentioning. Dr. Tendulkar could be called an old and committed economist. India has lost one of those thought provoking economist and those who know him will miss him greatly.

Binu Sankar

GTech thumbs up for SmartCity deal

TVM:

Group of Technology Companies (GTech), the industry body representing software companies in the State, has welcomed the agreement reached between the Kerala Government and representatives of Dubai-based Tecom Investments to fast track the implementation of the much-delayed SmartCity project at Kochi.

Thiruvananthapuram, June 28:

The new agreement not only raises the viability of the project but also promotes the cause of the services sector as a whole, according to Mr V.K. Mathews, Chairman, GTech, and Executive Chairman, IBS Group.

NEW MILESTONES

It is equally encouraging to note that clear cut milestones – opening of the SmartCity office by August 31, a concept master plan within a month thereafter and commencement of work by October 31 - have been spelt out. These are welcome signals, he added.

“Information technology is one of the most suitable industries for a State like Kerala. The industry offers huge employment opportunities with attractive remuneration.

“If encouraged to grow, IT industry has the potential to dramatically transform the socio-economic landscape of the State.

“The SmartCity project would be a significant step in this direction,” Mr Mathews said. The decision to convert SmartCity into an industrial township under the Services SEZ of the Government of India would provide an enabling ecosystem for the growth of IT and general services activities in the State.

ENABLING ECOSYSTEM

GTech compliments the State Government for taking steps to implement this important project and feels that this would send out a positive signal to potential investors, Mr Mathews added.

The conversion of smart city into a multi-service SEZ using the extra four acres from the Kerala Industrial Infrastructure Development Corporation should be looked up on by Tecom an opportunity to build a self-sustained township in the region, said Mr Anoop P. Ambika, Secretary, GTech.

This township should not only concentrate on building apartments but also should cover the civic and social infrastructural aspects – education, waste management, sewage treatment and drinking water,” Mr Ambika added.

Industry hails SmartCity deal

Positive signal for potential investors: GTech

The Group of Technology Companies (GTech), the industry body of the software companies of Kerala, has welcomed the agreement reached between the government of Kerala and representatives of TECOM to fast track the implementation of the SmartCity project Kochi.

A pressnote issued by Gtech said the agreement would help not only to enhance the viability of the SmartCity project but also promote the general services sector. “It is equally encouraging to note that clear-cut milestones – opening of the SmartCity office by August 31, concept master plan within a month thereafter, and commencement of work by October 31 – have been spelt out. These are welcome signals.”

It said the decision of the government of Kerala to convert SmartCity into an industrial township under the Special Economic Zone of the government of India would provide an enabling ecosystem for the growth of IT and general services activities in the State. GTech complimented the State government for taking steps to implement the project. It expressed confidence that this would send out a positive signal to potential investors.

Suitable industry

“Information Technology is one of the most suitable industries for a State like Kerala. It offers huge employment opportunities with attractive remuneration. If encouraged to grow, it has the potential to dramatically transform the socio- economic landscape of Kerala. The SmartCity project would be a significant step in this direction,” said V.K. Mathews, chairman of GTech and executive chairman of IBS Group.

Township

“The conversion of SmartCity into a multi-service SEZ using the extra four acres from KINFRA should be looked upon by TECOM as an opportunity to build a self-sustained township in the region. This township should not only concentrate on apartments but should also cover the civic and social infrastructural aspects like education, waste management, sewage treatment and drinking water for the region,” said Anoop P. Ambika, secretary, GTech.

KPMG takes a peep at the way forward for Kerala

Over the past five years, Kerala has maintained a GDP which is higher than the national average of 7.4% and has a strong potential to set an example for other Indian states to achieve its current economic status. With a new Government focussed on development and investment, KPMG envisions Kerala as the next corporate hub. This was the outcome of a panel discussion under the broad theme of ‘Kerala - The Way Forward’, facilitated by KPMG to explore opportunities for sustainable economic growth in Kerala.

Setting the tone for the discussion, Russell Parera, CEO, KPMG in India said, “Kerala has the potential to become a favourable investment destination provided it’s more investor friendly. With increased focus on knowledge based industries like IT / ITeS & BT, there exists immense growth opportunities in Kerala. Kerala should identify segments that it would like to focus on and then have a road map on how to attract investment within India and globally in these sectors”. He also added that the SME sector will be a key contributor to Kerala's growth in the coming years.

Presenting his views, T Balakrishnan IAS, Addl. Chief Secretary, Industries Department, Govt. of Kerala said, “The future of Kerala is in retail and let the money flow where the returns are better. There has to be a shift from manufacturing and agriculture to retail. We can be the richest State in India if we focus on retail, commerce and services”.

V K Mathews, Executive Chairman, IBS Group observed that Kerala went backwards in the last ten years compared to other states with little focus on investment, meaningful job creation and infrastructure. He said the IT industry offered enormous growth options with little impact on the environment. He added that the State needs to address the perception issue to attract investment”.

C Balagopal, MD, Terumo Penpol while sharing his experiences of being a manufacturing entrepreneur in Kerala said, the future on Kerala was in decentralised manufacturing with a focus on value added products. There was a need to pursue a development agenda focusing on basic infrastructure.

According to KPMG, the large pool of SMEs in Kerala, which includes companies in sectors such as IT / ITeS / BPO, commodities and spices, financial services, tourism, and real estate, have the potential for immense growth.

Mervin Alexander, CEO, Technopark; Binu Sankar, CEO, GTech; Alexander Varghese, Country Head, UST Global; Rakesh Gupta, COO, ACIS and E M Najeeb, MD, ATE were among the host of senior management executives from various sectors like IT, Hospitality, Real Estate who were present for the interactive session.

Anil Philip
Kerala IT News

From the world of IT to Kathakali

Thiruvananthapuram: On Thursday night, when Sethunath Nair dons the role of Bhima, he will temporarily log out of his programming environment and enter the world of art as a Kathakali artiste.

Head of ASP operations at IBS Software Services, a Technopark-based company, Sethu is set to enthral fellow IT professionals with his performance on stage.

Sethu has over 13 years of experience in the industry and has worked in the Middle East and Singapore in various capacities specialising in Oracle and Database Administration.

Sethu started learning Kathakali at the age of nine under reputed teachers including Kalamandalam Sreekumar. He has performed in different temples and kathakali clubs. Currently he is practising under Kalamandalam Ratheesan at Margi.

Sethu is actively involved in promoting Kathakali online. He started a group for Kathakali on Facebook which serves as a platform for creative initiatives and healthy discussions. He has also contributed actively to various online sites like kathakali.info. He is also a prolific blogger (nishkkalankan.blogspot.com)

The Kathakali programme being organised by Natana, the cultural club launched by Technopark and GTech (Group of Technology Companies), on the Technopark campus on Thursday will witness the staging of ‘Kalyanasaugandhikam,' based on a story from the Mahabharata.

“We chose Kathakali for the sheer beauty it portrays through its mesmerizing mudras and vibrant colours,” says Binu Sankar, CEO, GTech.

The artistes to perform in the play include Kalamandalam Ratheesan as Hanuman, and Margi Sukumaran as Panchali. Margi Venugopal will perform on the chenda and Margi Ratnakaran on the maddalam.

Songs are by Kalanilayam Rajeevan and Tripunithura Arjun and costumes by Margi Gopan and Party.

Bright prospects for IT sector in State

ASSOCHAM study says Bangalore is losing its charm as IT hub

Poised for a leap: The Infopark in Kochi is planning to market its space to leverage the new possibilities before the State IT sector.

KOCHI: The losing charm of Bangalore as an Information Technology (IT) hub presents the State with an opportunity to pitch itself as an alternative investment destination for IT and IT-Enabled Services companies.

For that to happen the State, however, will have to position itself and market its potential in the right way besides formulating farsighted plans to fine-tune its infrastructure capabilities, according to IT players in the State.

A recent study conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) revealed that Bangalore was in danger of being dislodged as the premier IT hub of the country thanks to its crumbling infrastructure.

Gurgaon and Noida were the new contenders to the IT throne, with 55 per cent of IT companies in Bangalore preferring to shift their operations to these satellite cities, the study said.

Gigo Joseph, Chief Executive Officer of Infopark, believes that Kerala can take similar advantage from the IT companies' new found preference for tier two and tier three cities. “We are planning to market our upcoming space in a way to leverage the new possibilities before the State in the IT sector,” Mr. Joseph says. Infopark along with its co-developers is set to develop over 1 crore sq ft in the next five to eight years. The growth forecast of 16-18 per cent by the National Association of Software and Services Companies for the country's IT sector also augurs well, he says.

Anoop P. Ambika, secretary of the Group of Technology Companies (GTECH), feels that greater industry-academia collaboration is the need of the hour as quality and value of services offered will be critical in the days to come.

“Similarly, we need to have in an Invest in Kerala Mission drawn of representatives from the government, industry, and well-connected Malayalis abroad to bring about a change in perception of the State as an investment destination. Successful entrepreneurs from the State sharing their stories in front of a global audience will definitely help that image makeover,” Mr. Anoop says. Developed countries have even city-specific mission to attract investments.

The scope for connectivity from Kerala to Europe through Dubai should also be prominently highlighted, he adds.

According to IT Department sources, the brand Kerala has to be projected as a more complete package. Campaigns should convey the investment possibilities in the State also rather than merely evoking images of Ayurveda or Kathakali alone as has been the case now because of the mostly independent nature of campaigns by different departments.

They, however, feel that lack of auxiliary services like international public schools of repute in the State is a major drawback since quality education for children is a high priority for IT employees.

Mr. Anoop warns that civic issues like solid waste management may prove to be a challenge to the State in the days to come hampering its IT prospects unless the government resorts to thoughtful civic planning immediately.

GTech pitches for a Kerala model

THIRUVANANTHAPURAM: The Group of Technology Companies (GTech) - the industry body of software companies in Kerala - has mooted a ‘Kerala model' of IT development wherein the industry will be taken to semi-rural and rural areas where there is “critical mass of employable graduates”.

The GTech plan calls for IT companies to form at least 50 clusters, each employing 100 to 200 local persons. An equal number will be inducted each year.

Those recruited will be given formal, on-the-job training resulting in skill enhancement. The companies, in association with universities, will help these employees get a professional qualification such as the MCA degree.

Into the mainstream

At the end of five years, many of these employees will be ready for mainstreaming into the IT sector, GTech chairman and IBS chief V.K. Mathews told the media here on Thursday.

This plan was explained to Chief Minister Oommen Chandy and to IT Minister P.K. Kunhalikutty two days ago.

Inputs sought

They were very receptive to the idea and asked GTech to given them additional inputs for the new IT policy which would be declared as part of the 100-day initiative of the government, Mr. Mathews said.

The government would have to “incentivise” this new IT model.

This could be in the form of absorbing the setup costs of the clusters.

Wherever possible, the new model could be integrated into the ‘techno lodges' set up in different parts of the State.

The clusters should not be set up by the government but by the companies themselves. Each cluster may cost a company at least Rs.20 crore.

Skill development

This decentralising of the IT industry would at one stroke provide employment to a large number of non-engineering graduates who otherwise would not make into the rolls of IT companies because of their poor English language and communication skills and because they were not savvy about western social skills.

The employees in the clusters would not directly interact with the mother company's clients.

Moreover, the clusters need not be built to exacting international standards.

This would maintain the cost-competitiveness of Kerala's IT companies, he argued.

“The government needs to give a policy framework to this model. It needs to identify the towns where clusters can be set up. The obligations of the companies and that of the government need to be clearly worked out,” he said.

Parallel road

The new model needs to be rolled parallel to the promotion of the traditional city-centric IT model.

Under this, the State government should ask the Centre to extend the STPI tax benefits to tier-two and tier-three cities.

The influence of NASSCOM should also be utilised for this purpose.

The government should not raise the rent at technology parks. Already Kerala is much more expensive than Bangalore on this front, Mr. Mathews said.

Brand Kerala should be promoted in a public-private partnership mode. There should be industry representation in government advisory committees on IT, he added.

Report of the Kerala IT delegation visit to Denmark and Sweden (9th May to 13th May 2011)

Kerala IT in partnership with Group of Technology Companies (GTech) has undertaken a visit to Denmark and Sweden from 9^th to 13^th of May 2011 as part of a Market Connect Strategy. The key objective of the delegation was to provide the Kerala IT companies an exposure to the Nordic ICT market and provide networking opportunities with the Nordic companies and agencies and explore business opportunities. 7 companies participated in the delegation and the delegation was led by Ms. Ishita Roy IAS, Director, Kerala State IT Mission and Mr. Mervin Alexander, CEO, Technopark

The key take away from the delegation were the following

a. One to one meetings with potential business partners

b. Networking meetings with business and government organizations

c. Promoting the Kerala IT Industry and the Technology Parks.

d. Business relationships with the Trade and investment agencies of Denmark and Sweden

The delegation visited Copenhagen in Denmark and Lund, Stockholm and Gothenburg in Sweden. The visit was organized by Kerala IT in partnership with GTech and Invest in Denmark and Invest in Sweden.

The delegation on the first leg of the journey in Denmark participated in an interactive meeting with the Invest in Denmark officials on strengthening partnerships between Kerala and Danish IT Industry in Copenhagen. The meeting was followed by a match making programme which was attended by 15 ICT companies of Denmark. Experion Global, the Technopark based company signed two major contracts to develop mobile applications for the Danish market. The companies who were part of the delegation made inroads into verticals like Life sciences, Clean Technology, Renewable Energy and Smart Grid applications. The companies also met up with potential partners through one to one meetings and a solid foundation has been laid to tap the Nordic ICT market. The market size is 12 billion and is growing at a CAGR of 7%.

The delegation also visited the L&T Infotech campus to understand the marketing strategies used by Indian companies to tap the Nordic market. The delegation also had an interaction with the officials of the Oresund IT Park and the Kerala IT delegation extended an invitation to the Oresund IT Park officials and the companies to visit Kerala. The delegation also called upon the Indian Ambassador to Denmark Shri Ashok Kumar Attri.

The delegation later travelled to Lund which is the science and research hub of Sweden. The delegation participated in the networking meetings organized by Invest in Skane. 10 companies from Lund participated in the meetings. Discussion on strengthening the research collaboration between companies from Kerala and Lund was discussed. The delegation later visited Ideon Science Park and interacted with the companies. Ideon Science Park has a close academia- Government- Industry partnership where cutting edge technologies in the field of Health care, Energy and telecommunication are developed.

The delegation then travelled to Stockholm for a networking meeting organized by Invest in Sweden in partnership with TiE Nordic and Swedish India Business council. Around 22 Entrepreneurs, CEO’s and academicians were present for the meeting. Experion Global, Kreara Solutions, Ushus Technologies and Waybeo Technologies, the companies from Technopark held one to one meeting with partners. Kerala IT delegation was able to position Kerala as a potential investment destination for the IT/ITES industry.

The delegation later visited Invest in Sweden office and held strategic discussion with the senior management on strengthening the IT relations between Kerala and Sweden. Invest in Sweden promised to speak about Kerala and its opportunities to the IT Industry in Sweden. The delegation later called on the Indian Ambassador to Sweden Shri Ashok Sajjanhar. The ambassador also promised to provide support to the Kerala IT entrepreneurs to locate suitable business opportunity in Sweden. The delegation later participated in a networking meeting organized by Computer society of Sweden and Delphi law firm.

The delegation finally visited Gothenburg and attended a networking meeting organized by the business region of Gothenburg, the local Government agency promoting trade relations. 12 companies from Gothenburg participated in the networking meeting. The delegation later visited Lindholmen Science Park and interacted with the officials followed by a visit to the various facilities in the park. The delegation also visited the Biotech center in Gothenburg.

The visit of the Kerala IT delegation aroused considerable interest among the business community in Denmark and Sweden. Kerala IT delegation is the first major delegation from India visiting the region for business opportunities. Kerala companies would be able to penetrate the Nordic region as this is one of the most outward looking economies in Europe with less discomfort in the concept of offshoring. The actual presence of a small number of IT companies from India portrays that the market in unexplored.

The other factors that favors the region include high IT adoption, easy acceptance of English and large public spending on IT. The Nordic region have the best business environment with the most flexible and liberal Government policies.

Almost half the GDP of Denmark and Sweden is contributed by small companies, mostly family-owned businesses with 15 to 30 employees. It is a challenge for such firms to deal with large Indian companies operating from the metros. These firms would feel more comfortable working with small companies in Kerala. With a large number of small firms in the IT sector, Kerala offers a matching ecosystem for investment and collaborative research. These sorts of collaborations between Kerala and Nordic companies would eventually lead to large investments flowing from the Nordics to Kerala. Such sorts of engagement with the Nordics need to be followed up to leverage the full potential for the benefit of the Kerala IT Industry.

These are the follow up activities being planned

a. Invitation to the Danish and Swedish Ambassadors to India to visit Kerala and Technopark

b. Invitation for the IT companies from Denmark and Sweden to visit Kerala and the technology parks

c. Repeat visit of the Kerala IT delegation to Denmark and Sweden next year

d. Fostering partnerships between the Kerala IT Industry and the Universities in the Nordics.

e. To work with the Governments of Finland and Norway to facilitate a strategic relationship.