Byapaar.com – The Indian Business Blog

Business or enterprise is an organization where buying or selling of goods takes place. It is a place where trading of goods and services takes place. Over the years India has been a hunting ground for many personalities to set up a business in that country. India is quite famous in the global market for its business. Their export quality has also been very good. Many companies import wheat and rice in India as India produces bulk of rice and wheat do its good agricultural condition. India is also doing well in cotton, silk, leather business and many more. Seeing with many companies around the world has shown interest to do business in India, as they know once they have habituated the traditions and the customs over there and winning the people’s heart by satisfying them, it will be difficult for them to get insolvent or not to do business there.
In India doing business is just not enough. In this part of the world people are very emotional and sensitive so to do business you have earn your respect, the loyalty and maintain a healthy relationship with the people so that they come again and do trading with you. Customer satisfaction is the key formula to do business in any part of the world. Many foreign companies have opened their branches in India like Nike, Adidas, Puma and many more. Over the years they have successfully won the hearts of million people especially the young generation. This happens because of the quality of their product; forcing the people to buy this product and making them come again and again. Due to this change in time people of India have slightly inclined towards the Western culture and so with the change of fashion people who are doing business have to change their business strategies too. The foreign companies which struggled to make a name in the ‘70s are now ruling India. The domestic companies are also doing well by increasing their quality of their product and giving a tough competition to the foreign companies which are doing business here.
In recent years Indian markets have been very competitive. Everybody is trying to prove among the people that they are the best. But nowadays people’s mentality has changed a lot. Now they don’t buy stuffs which they find attractive. Nowadays they follow brands; it may be an Indian brand or a foreign brand. Nowadays they go by quality and not attractive features. Some brands have made a name in India by winning people’s heart and the customer likes to buy only those brands which are famous in India and also outside.
This is what Indian business is all about.

Day before yesterday, the caretaker Finance Minister of India Mr. Pranab Mukherjee (the Ministry usually lies with the Prime Minister Dr. Manmohan Singh who is recovering from By-pass surgery) announced another round of stimulus package to bring impetus into the economy. This is the third such initiative by the government in as many months. This time no fund is to be infused to help the market reeling under severe liquidity crunch but the latest effort is aimed at reducing production costs of goods so that demand increases and industry grows. For this purpose the government has reduced excise duties on several products by 2 percent to 8 percent from existing rate of 10 percent. This effectively means cheaper steel, cement and consumer durable goods. The automobile sector which had a booming last year but suffering from current economic meltdown will not benefit directly. But due to cheaper rates of raw materials and accessories it might get some indirect lift. Also the heavy vehicle sector which has excise rate of 20 percent will get direct benefit from the latest move.

But the highest gain will be reaped by the service sector as service tax too was slashed from present level of 12 percent to 10 percent. It will benefit all those industries engaged in service sectors like hospitality, BPO and telecom. Experts expect that mobile rate will come down due to reduction in service tax. This reduction in taxes will cost the government to the tune of Rs. 300 billion.

This third stimulus package was announced on a day global rating agency Standard & Poor downgraded India’s sovereign credit rating due to ever growing fiscal deficit that is likely to be around 11.2 percent of GDP (Rs. 3620 billion) during this fiscal ending 31st March. Being an election year, the government took many populist measures like hiking central government employees’ salaries, writing off agricultural debt, high crude prices for most part of the year and lastly but not the least – the economic stimulus packages. This down gradation will not harm the government as it seldom borrows from foreign (continue reading…)

In an unprecedented move, Mr. Ramalinga Raju, promoter and Chairman of Satyam Computer Services, the fouth largest IT company in India has announced that he has been showing false and inflated data in the company balance sheet for years. He stated that from what was a minor gap in the company book when it was a company with only handful of employees, the magnitude of the problem grew with that of size of the company that currently employs around 53,000 and has operations in 66 countries worldwide. It boast of serving one third of Fortune 500 companies and also the US government.

Satyam has been under scrutiny since World Bank banned the company in October for allegedly installing spywares in some of their computers which Satyam denies. Then, in December Satyam management faced a revolt by investors for a proposed takeover of two companies engaged in construction for approximately $1.6 billion. It has later been found that Mr Raju has big stakes in those two companies.

Since then a tussle between the board and shareholders has been going on and shareholders have been demanding resignation of the Chairman and complete overhaul of the board. In the meantime it was found that promoters were just holding meager stake in Satyam as they have pledged most of their shares with lenders against loans. All these controversies led to huge loss of Satyam’s shares at the stock market. Already speculation was doing the round that Mr. Anil ambani – the Chairman of cash rich ADAG group might step in for a friendly takeover.

The problem got so big that Mr. Raju had no alternative but to reveal all his frauds and resign because he no longer has enough stake to control the company and if others seek to take over- they will find all the wrongdoings by him once they go through Satyam’s books.

Analyst say that Mr. Raju has not only damged future of Satyam but has created a bad impression on whole IT and outsourcing industry of India. Some commentators say that foreign clients might loose confidence in Indian companies as there is a big question mark on India’s corporate governance and transparency of their operations. Otherwise how could Satyam keep on with the fraud despite being auditored by world renowned accounting firm Pricewaterhouse Coopers?

Amidst all these, top leadership at Satyam has resolved that they would carry on and make Satyam a transparent corporation. But the maimum damage has already been inflicted not only for Satyam but questions are being raised on corporate ethics of whole Indian Corp. Shame on Satyam.

Amidst global economic turmoil and financial crisis caused by US subprime lending crisis that caused havoc in markets around the world, Indian nationalized banks in consultation with the government have announced reduction of interest rates on home loans of up to Rs. 2 million that could lead to partial impetus in the realty sector. Just last week industrial production in India contracted for the first time in 14 years.

According to the new rates set by the banks, housing loans of up to half a million Rupees will now have interests of 8.5 percent and that of loans between half a million to two million will have interest rates of 9.25 percent. Presently, interest for home loans is 9.75 to 10.5 across various sectors in the banking industry.

This brings very good news for millions common people who can not afford to think of a house or flat beyond Rs. 2 million. Another additional feature of the new housing loan package is that interest rates will remain frozen for 5 years which means clients will not have to worry about increased equated monthly installments (EMIs) during this period. Also they will enjoy the benefit of rate cuts in between while banks will take the burden if rates rise. After five years, consumers could choose either fixed or fluctuating rates according to their choice. This makes debt management a lot easier for the common person.

Not only this, but banks have also reduced the margin requirements for loans. While previously, borrowers were required to pay between 20 to 25 percent of the total amount as margin money, it has been trimmed down to 10 percent for loans up to half a million and 15 percent for loans between half a million to 2 million.

According to bankers, this move will see around Rs. 150 to 200 billion being released over next few years and help the common men who constitute eighty percent of nationalized banks’ housing loan book. (continue reading…)