Byapaar.com -The Indian Business Blog

Can you do business in India? – Probably yes.
Can you do business in Bengal? Keep reading the post ….

I thought I would not cover this story as it is so controversial and getting huge media coverage. But now I think I should do my bit of .the story.
It seems Communism has come full circle in India and West Bengal in particular. It was during 60’s and 70’s that the communists took the nation by storm with their war against then existing feudal system and were instrumental in the introduction of Land Reform Law in West Bengal after they came into power for the first time in 1967. They have been ruling the state continuously since 1977.
The turning point came in 2000 when the Patriarch of the party Jyoti Basu retired from Chief Ministership and handed it over to Buddhadeb Bhattacharya, a young and energetic leader with an eye for development. It must be noted that between 1977-2000, almost all industrial and business houses left Bengal and it became a industry back-burner from a leading state. Soon after assuming office Mr. Bhattacharya decided to correct it and started to transform the government into a business friendly one. His government were now wooing foreign investors and promoting Bengal as a favored business destination to set up industries. Business man too got impressed by his genuine attitude and signed lots of Memorandum of Understandings with the government. So came big business houses like Tata! The Tata Automobiles choose to set up their pet project of Rs. 100,000 car Nano factory in Singur.
The Nano is arguably the most inexpensive car in the world conceived in 2003 by the Tata Group Chairman Ratan Tata and aimed primarily to give a city car to millions of Indian middle class families who can’t afford other cars but can afford motor bikes and scooters. Presented for the first time in the 9th Auto Expo in Delhi in January 2008, the car has already created huge excitement among prospective consumers.
But the reason of this post is not about the car – rather its about the proposed manufacturing unit. In a state where land is of prime with a population density of 904 per square kilometer, the West Bengal government allocated 997 acres of land for the factory in a fertile agricultural area and about 15,000 farmers have been dislodged. Now they fear that the government will not compensate them and they would thus loose their livelihood. Enters Mamata Banerjee, the nemesis of the ruling communists and firebrand leader of Trinamul Congress, the main opposition party in the state. It seems her only goal in politics is to oust the communists from power, by hook or by crook. She immediately grabbed the opportunity at Singur (after she fought a prolonged battle with the ruling party at Nandigram where the Selim group was allocated thousands of acres of farmland for a proposed SEZ) and was now giving the same medicine like Hartals (strike), blockade to the communists who used these as their main weapons during the land reform movement in the state few decades back. The Tatas had to stop construction work due to continuous disturbance and finally announced on 2nd September that they were pulling out the project from Bengal! Read the rest of this entry »

The Indian stock market is back to its normal bullish run again after a prolonged dull run. The BSE Sensex gained 551 points to close at 15049.86 on Monday, single largest gain in a day since July 23^rd, 2008 when the index surged 838 points. The index has been hovering around 14000 mark for long time. This bullish run has been due to rate-sensitive stocks and that of state owned oil and gas companies gaining ground as news of Hurricane Gustav sparing major US oil fields caused a further collapse of international crude price. The price of crude oil has been cooling down steadily after it hit high of $147.27 per barrel on 11^th July as Russia’s conflict with Georgia disrupted supply of oil and gas. Demand of fuel in US and China, the two biggest energy consumers has also softened the international market.

More than anything else, international oil price has single most important bearing on Indian economy as India’s 90 percent energy consumption depends on crude oil exports. Since oil prices started to soar, the country’s trade deficit has also been widening every month and it touched a record $10.80 billion for the month of July on higher oil import bill. Inflation has also been rising rampantly despite the government raising interest rates to check it. It also came down to 12.34, the first time in moths after a prolonged series of increase.

Now that everything is over, we can hope the inflation to come down to normal (4 to 5 percent), the trade gap to decrease, stock market to be buoyant and the overall health of the economy to become better.

Despite the decrease in the international crude price, the government has ruled out any slash in the existing fuel price. In a meeting with the media, Petroleum Minister Murli Deora told reporters

“Where is the scope for reducing prices? Oil companies are still making losses,”

Petroleum Secretary R.S. Pandey said that

“Oil companies continue to lose money on petrol, diesel, domestic LPG cylinder and kerosene. There has not been a substantial reduction in global prices to warrant a price cut,”

Airlines also announced that the fall in Air Turbine Fuel will not see an immediate reduction in air fares.

What a shame! We are long into 21st century and information and networking super highway. Today, virtually each and everything is being done through digital media and mechanism. But for so long, auctioning of tea in India was being held in the age old method of manual outcry system. This resulted in many problems that come along with the old method like incoherent price increments at different centers, different lot sizes, price discovery and audit trail and so on. So a Tea Board commission was constituted and it recommended overhauling the old system and standardizing the auctioning process across auction centers.
Subsequently, the Tea Board sought help from the National Stock Exchange (NSE). The Information Technology (IT) arm of NSE started developing customized software for e-auctioning. Finally, the Tea Board of India has announced on 30th August that auctioning of tea in the country will go online in coming November. Actually, it was supposed to go operational in October, but the launch had to be delayed due to Puja (festival) Vacation. Executives of the board expects the IT solution will bring in a common platform for all auction centers which are now situated in Siliguri, Guwahat, Kochi and Jalpaiguri. The software is also expected to smoothen and expedite the process of future trading of tea besides new price discoveries, better transparency, standard contract descriptor, common and inform lot size, market timings, uniform price increments and automatic matching and audit trail. The stakeholders in public auctions will now be able to do their business in much easier and organized manners through this e-auctioning system. But the program is still under beta and as Ms. Roshni Sen, Tea Board deputy chairperson said

“Things are going on well. We will be carrying out software and system testing by September. And the –e-auctioning of tea will commence from November.”

For the record India is one of the largest tea producing countries in the world and total production for the year 2008 is expected to touch 962 million kilograms.