After celebrating his 70th birthday yesterday, Ratan Tata would in the normal course of affairs be facing mandatory retirement from the Tata Group. Two years ago, however, India's most respected and acquisitive conglomerate ex-tended to 75 the age until which non-executive directors could serve, giving the man who has transformed it over the past 16 years a new lease at its helm. Although corporate governance purists at the time criticised the change as retrograde, it is a decision that few investors now regret.
Mr Tata will be one of the most visible faces of the new India in 2008. He was yesterday waiting to hear whether Tata Motors, a truckmaker that has diversified into passenger cars, had been successful in its offer for Jaguar and Land Rover, luxury brands put up for sale by Ford. In the wake of this year's audacious $13bn (£6.5bn) purchase of Corus by Tata Steel, the Indian company's bid for these two prestige marques has again highlighted the risk-taking verve of one of India's most ambitious corporate empire builders.
The news will come as Mr Tata prepares to unveil the most keenly awaited car ever to roll off an Indian assembly line. Tata's small car, which the Cornell-trained architect helped design, is slated to appear at the Delhi Auto Show on January 10. It will sell for Rs100,000 (£1,275) - a rupee figure known in India as one lakh - and bring motoring to a mass market. With a new plant in West Bengal able to make 250,000 a year, the "one-lakh car" will more than double Tata's car capacity. "Mr Tata encourages us to take big, calculated risks," says Ravi Kant, Tata Motors' managing director.
In 1991, when he succeeded his uncle, J.R.D. Tata, a man who was to India what Fiat's Giovanni Agnelli was to postwar Italy, few expected the group to survive the onslaught of liberalisation. It earned most of its money in stodgy domestic industries dependent on the centrally planned "licence raj". The government told companies how much they could produce and protected them from foreign competitors. The family held only small stakes in many of the 300-odd group companies. Powerful barons ran the main businesses as rival fiefs.
Like Hindu souls, disposable plastic cups are many times reborn in Dharavi. In a spiralling continuum, they are discarded and gathered in, melted down to their polypropylene essence, and re-moulded in some new plastic form. Recycling is one of the slum's biggest industries. Thousands of tonnes of scrap plastic, metals, paper, cotton, soap and glass revolve through Dharavi each day.
Location is the key to this. Until two decades ago, the slum was next door to Bombay's biggest rubbish tip. This provided a livelihood for thousands of local dalits, for whom “ragpicking”—scavenging on society's leftovers for anything of salvageable value—is a traditional employment. The tip has since been shifted outside the city. So too, for want of space, have many of Dharavi's recycling units. Yet the roughly 6,000 tonnes of rubbish produced each day by a swelling Mumbai continues to sustain an estimated 30,000 ragpickers, including many residents of Dharavi. The slum is also host to some 400 recycling units.
Around 6am, the squealing of copulating rats—signalling a night-long verminous orgy on the rooftops of Dharavi, a slum in Mumbai—gives way to the more cheerful sound of chirruping sparrows. Through a small window in Shashikant (“Shashi”) Kawale's rickety shack, daylight seeps. It reveals a curly black head outside. Further inspection shows that this is attached to a man's sleeping body, on a slim metal ledge, 12 feet above the ground.With maybe a million residents, crammed into a square mile of low-rise wood, concrete and rusted iron, Dharavi is a squeeze. And in Shashi's family hutment—as slum-dwellings are known in Mumbai, where half the city's 14m people live in one—it feels like it. As the sparrows stir, so do the neighbours. Through the plank-thin walls of the tiny loft where Shashi, a jobbing cleric-cum-social-worker, lives above his parents, come the sounds of people bumping and bickering.On one side is a family of 12 living in a 90-square-foot room—about half the size of an American car-parking space. On the other, eight people share a similar area. Night-sounds suggest they include a man with a painful cough, a colicky baby and an amorous couple. At least they can squeeze inside, unlike the man roosting behind Shashi's hutment—and unlike Parapa Kawale, a 22-year-old friend and neighbour, who had dropped by the previous evening to share a spicy bean curry.
China and India are poorer than we thought; rich countries produce even more than we realised. Those are the obvious conclusions from an unprecedented exercise, carried out by a World Bank-led coalition.
The “International Comparison Program” attempts to compare the size of the world’s disparate economies on the basis of purchasing power. On this basis, China’s output is just 9 per cent of global gross domestic product, down by more than a third from the previous estimate of 14 per cent. India’s share of global GDP is down from 6 per cent to 4 per cent. The total output share of developing economies is down by a sixth. These are huge revisions to the figures.
The obvious questions are: how could the old figures be so wrong? And can we trust the new figures? The simple answer is that calculating purchasing power is hard even in principle.
Tata small car set to offer 25 kmpl mileage
Economic Times — economictimes.indiatimes.com
Published on December 21, 2007
Ratan Tata and the Tata group have for months zealously kept a tight lid on the details of the Rs 1-lakh car that is slated to roll out of Tata Motors' Singur factory in June 2008. But on Tuesday, the shroud came off in singular circumstances.
"It's an eco-car with a 25 km-per-litre mileage on petrol, meets every international standard and specification, including Euro-4 norms. Acceleration wise, it's the same as a Maruti 800." That's exactly how RA Mashelkar, former CSIR director general, who is now an independent non-executive director on the Tata Motors board, chose to describe the Rs 1-lakh small car on Tuesday. He was recounting his recent ride on the prototype at the Tata Motors' Pune plant.
"It's a tool for inclusive growth," Mr Mashelkar said in Kolkata on Tuesday.
Investment in health, education, a must
Hindu Business Line — www.thehindubusinessline.com
Published on December 21, 2007
By G. Chandrashekhar
"Thani Oruvanukku Unav(u)ilaienil, Jagattinai Azhithiduvom' was the war cry against hunger the celebrated Tamil poet Mahakavi Subramaniya Bharathiar unleashed almost a century ago. Loosely translated, it means, "Even if a single person goes without food, we shall destroy the world". One can well imagine the fervour the maverick poet-patriot brought to the subject of poverty and hunger.
What has the world come to in the last many decades? Despite tremendous advances in science and technology, huge gains on the economic front and, more recently, a globalising world, today, one out of every six in the world or close to 1.25 billion are mired in poverty and hunger.
A large majority of the world's poor (typically earning less than $1 per day) are in developing countries, concentrated mainly in Africa and Asia. India is home to a large number of poor. Most of India's poor are homeless, under-fed and under-clothed.
Admittedly, Asia's contribution to poverty reduction has been noteworthy. Rapid economic growth in some key Asian countries (led by the world's most populous nation China) and pro-poor policies have, no doubt, combined to reduce the number of the poor; yet, income disparities have considerably widened in this region. Struggling to cope with the challenges thrown by this disparity, governments are constantly exploring ways and means to raise the living standards of those at the bottom of the pyramid.
By Ian Callaghan
What makes a ticket hot? Novelty and publicity are two essential ingredients, but real incandescence only comes with scarcity.
When a United Nations "Year of Microfinance" in 2005 was followed in 2006 by the award of the Nobel Peace Prize to the Grameen Bank and its founder, Dr. Muhammed Yunus, the world got to know about the supposedly esoteric business of providing financial services to the poor. By the time Mexican microfinance bank Compartamos came to the market with the sector's first IPO in April, the white heat of interest in the offering caused a 13-times over-subscription for the 30% of the bank on offer--and created the first microfinance millionaires.
By Elizabeth Littlefield
In the three decades since Muhammed Yunus gave his first $27 loans to women in Chittagong, Bangladesh, the microfinance industry has come a long way. What began as a collection of individual non-governmental organizations funded by development donors has become a professional business offering not just credit, but a full range of banking services to poor people.
Hundreds of microfinance institutions have matured and become profitable. Local commercial banks are beginning to see opportunities at the low end of their retail market. Even mobile-telephone operators are innovating with cellphone-based banking services.
It's attracted a flood of new money from investors and big commercial banks. There are now 80 investment funds that specialize in microfinance, 30 of which were established in the last three years.
By Michael Chu
Through the ages, we have come to associate profit with greed and serving the poor with self-sacrifice. Accordingly, now that the outstanding performance of leading microfinance banks has inserted banking at the base of the pyramid as an integral part of emerging-markets finance, socially conscious investors are starting to agonize over earning returns while serving the poor. By focusing on their motivations in helping the poor rather than on poverty itself, they have obscured the pragmatic realities of the problem they wish to address.
Any intervention that seeks to meaningfully roll back poverty--whether it is microfinance, education, primary health care, housing or access to basic services such as water and energy--must fulfill four basic conditions.
A lot of people are chasing returns in barefoot banking. Here's what you should know before you follow.
Maria Guadalupe Licona, of Tulancingo, Mexico needed to expand her herd. So she borrowed $100 for six months from a microlender that charges on average 40% interest and purchased additional sheep and pigs.
The money came from somebody like J. Alex Hartzler. He and his partners sold their Web Clients ad business to online marketing firm ValueClick (nasdaq: VCLK - news - people ) for $141 million in July 2005. A Fulbright scholar who volunteered in Bolivia with the Mennonite Church before entering law school, he wanted to put some of his gains into doing good.
So Hartzler, now 39, invested first in an equity fund and later in a debt fund managed by MicroVest of Bethesda, Md. and backed by a portfolio of notes taken out by mostly small Latin American borrowers.
