17th

At Maruti, are the Workers striking Home the Point?

New Delhi: As the latest workers' strike at Maruti's Manesar facility enters its 10th day, it is exposing serious chinks in the industrial armour of the 30,000-crore auto behemoth. The agitation is raising questions over practices in the burgeoning auto industry in the Gurgaon-Manesar-Dharuhera-Rewari belt and the role of competing labour unions in the market for the political capital latent in the region's 400,000 workers.

Even as the situation at Manesar represents a veritable tinderbox, the precise genesis of the strike and the events that shaped the impasse remain deeply contested. But some conclusions are possible. The cordial relations the company shares with workers in its other facility at Gurgaon and the pressures from increasing competition in the auto industry seemed to have formed a blind spot that prevented the company from sensing the trouble brewing in Manesar.

Maruti Suzuki has had minimal trade union activity. The Maruti Udyog Kamgar Union, which the company regards as the official union, does not have an office-bearer from the Manesar plant. It also has had no election by secret ballot in 11 years, leading the striking workers in Manesar to jibe that it is a "management pocket union".

The company says it has 'persuaded' the 3,500-odd Manesar workers to be part of the same union, and not form a new one. The Manesar workers say the company has prevented them - by cajoling, intimidating and threatening - from forming a union.

Critical communication gaps - both between the management and the workers, as well as among different tiers in the management - seem to have exacerbated the crisis. The issues central to the impasse have changed in the course of the three rounds of strikes. Talks involving the management, workers and the Haryana government seem to have been nebulous as the workers have, at various points, been influenced by different trade unions and interest groups.

It is because the strike lacks a single burning, insurmountable issue, and that at the core of it are accumulated grievances and deep resentment triggered by the agitation and the unseemly events surrounding it, that the impasse has appeared perplexing to most.

After the workers vacated the Manesar factory premises on Friday, the company is expected to start production on Monday.

Late last week, more than 127 analysts, investors and fund managers participated in a conference call with Sonu Gujjar, a leader of the protesters, to understand the reasons for the agitation. The losses - 1,500 crore in revenues by now - and the legacy the strike will leave on Maruti Suzuki and India's largest auto belt could be real and lasting.

18th

Narayana Murthy was right; IITs short of 2500 teachersNEW DELHI: Less than a week after taking charge, two new directors at the Indian Institutes of Technology in Delhi and Roorkee are now grappling with a vexing problem all IITs are struggling with - an acute shortage of faculty. They might well be discovering one of the reasons why Infosys chairman emeritus NR Narayana Murthy thinks the quality of students at IITs is poor. Prof RK Shevgaonkar, who took over as director at IIT-Delhi last week, says IITs all over the country need 2,500 faculty members immediately to catch up with the standard student-to-teacher ratio of 10:1. Every IIT is short of 30% faculty, he says. This has happened due to addition of 54% seats to accommodate more students in the OBC quota in the past few years.

Shevgaonkar, the former vice-chancellor of Pune University, says IIT-Delhi has 416 faculty members against the required 800 teachers. This, despite the 107 faculty it has hired from across the world in the past four years. These are Indians with foreign degrees. IITs are not allowed to hire foreign nationals as permanent or full-time faculty, says Prof M Balakrishnan, deputy director (faculty), IIT-Delhi.

Pradipta Banerji, who took charge of IIT-Roorkee on October 14, is fretting over the poor 1:18 teacher-student ratio at Roorkee. "The sanctioned faculty strength at IIT-Roorkee is 900 and we are not even half-way through," says Banerji. He is already in talks with alumni networks to look for talent. "Why just abroad, we can look at hiring quality faculty members from other educational institutes in India," Banerji says.

India, which has not expanded its R&D institutions for at least three decades, is now stepping on the gas. It is not just the IITs that are expanding. Many institutions are coming up in specialised areas and some of them compete with IITs for faculty. The shortage of faculty is a direct consequence of this expansion, and it is unlikely to be solved for a long time. However, over a decade, the new institutions will create new scientists and engineers that can serve as faculty in IITs.

Until then, IITs have to find other talent pools. The director of IIT-Kanpur, Sanjay Dhande, who was in Washington DC last week for the Indo-US Higher Education Summit, was busy scouting for talent there. He has already identified two young professors as potential hires. IIT-Kanpur has one of the better studentto-teacher ratios at 13:1 with 350 faculty members, but it is still some distance away from the required numbers.

Younger IITs such as Guwahati, started in 1994, have it tougher. IIT-Guwahati has 295 faculty members against the 385 that it needs. "Shortages are more pronounced in certain disciplines and sub-disciplines," says IIT-Guwahati Director Gautam Barua. For instance, at IIT-Guwahati, there is a paucity of faculty talent in chemistry, design, computer sciences and bigger shortages in sub-areas such as database networks.

The paucity of talent at these institutes is harming the research potential, say academicians. "Our ability to take more PhD students is getting impacted due to the faculty crunch," adds Barua.

19th

Formula 1: With Noida track India up to speed with world's best

NEW DELHI: This Diwali season, infrastructure conglomerate Jaypee Group will make a bid to be counted among Corporate India's big boys of project execution as the unsettling scream of two dozen Formula One cars ring out loud on the Buddh International Circuit in Greater Noida.

On Tuesday, when the F1 hosts threw open the 5.4-km Herman Tilke-designed circuit and associated facilities to the media, the firm's building prowess and Greater Noida's investment potential looked poised to be noticed when a 300-million-strong global TV audience tunes in to the first Indian Grand Prix on October 30.

"We wanted to do something which nobody could point a finger at," Jaypee Group's 81-year-old founder Jaiprakash Gaur said during the unveiling event. In keeping with Gaur's stated premise, little seemed out of place at the 350-hectare motorsport complex that has come up off the Yamuna Expressway, also being built by the group. "We hope that with this event, we will be able to repair the damage the country's reputation suffered during the Commonwealth Games," he added.

While it may be too early to adjudge the event a success, the critical ingredients all seem to be in place in the right measure. An elegant and challenging track is in place, designed by the same German designer who has built the tracks at Sepang, Bahrain, Shanghai and Valencia.

The approach roads to the complex are complete and in top shape. Facilities for teams and press operations are impressive and even the landscaping seems complete. "I have raced on all the major F1 tracks across the globe and I rate this track as one of the best in the world," said Narain Karthikeyan, India's first F1 driver.

Formula One is as much a roving economy as it is a sport. The 19 races held each year at elite destinations around the world attract an ecosystem of high-octane entertainment, bigspending tourists, billionaire team owners, the glamour of celebrity racers such as Jenson Button, Adrian Sutil and Michael Schumacher, and the big global brands that use the elite sport as a marketing platform. While the teams find the economics of the sport as hard to negotiate as the tricky curves on a circuit, hosting an F1 race can help boost tourism and raise the profile of a destination, as Singapore's famous night races have now proved for three years.

While the actual race will last just two hours on October 30, the F1 bandwagon will roll into the city two days earlier. For fans who travel the world for the pure thrill of a F1 race, hosts usually put together entertainment events across three days. The spectre of troubles related to land acquisition is the only major hurdle that could cast a shadow over the event.

There have been reports about farmers in the region threatening to disrupt the event. They claim land was acquired from them with the promise that industries will come up there, providing round-the-year jobs to locals. But Gaur says such reports are inaccurate and those making such statements were not genuine landowners in the region and had political motivations. "The event will go ahead smoothly, all our visitors will be happy," Gaur said. Motorsports fans in the country should certainly hope so.

20th

Mahindra to do a Nano, working with Ssangyong on sub-Rs 4 lakh SUV

MUMBAI: If you're looking for fuel efficiency, your best bet is a small car. If adventure and a muscular look and feel are what you prefer to trip out on, a sports utility vehicle (SUV) would be your choice of wheels. But what if you're seeking both mileage and the pleasures of off-road driving - at a jawdropping price?

Say hello to the mini-SUV, a first-of-its kind vehicle in India - and perhaps the world - that utility vehicle major Mahindra & Mahindra (M&M) is developing with Ssangyong, the South Korean SUV maker it acquired last year. Codenamed the S101, the 'Nano' SUV - as it is being dubbed by some workers on M&M's shop floors - will be powered by 1-1.2 litre petrol engines and 1.5-litre diesel engines. Work on the project began a year ago, say people working on it; and the vehicles are expected to roll out of M&M's plant in Chakan on the outskirts of Pune - where the newlylaunched XUV500 is being produced - in 26-28 months. Estimated price range: between Rs 3 lakh and Rs 4 lakh.

The price tag is noteworthy because most mini-SUVs - typically under 4 metres in length - are premium products. The Jeep Wrangler, Nissan

Juke and Skoda Yeti are some of the best-selling mini and compact SUVs globally, yet their pricing is clearly premium - the Yeti, for instance, sells in India at over Rs 14 lakh.

If M&M can pull off the S101 at the stated price, it would make it the only mini-SUV in that price range anywhere in the world. To persist with the Nano analogy, it would do for SUVs what Tata Motors has done for cars by opening up an altogether new ultra lowcost category.

The S101 project is also the first joint development effort by the M&M-Ssangyong combine. For the South Korean maker of sports utility vehicles, the low-cost segment is alien, and hence a welcome addition to its range.

There's another reason both M&M and Ssangyong are keen on this segment: In India, passenger vehicles under 4 metres fitted with 1.2-litre petrol and 1.5-litre diesel engines attract a lower excise duty of 10% (for larger cars it is 22%). In South Korea, the vehicle will have a turbo-charged sub-1 litre engine as this segment does not attract a levy except for a 10% value-added tax.

Team of Over 100 Engineers at Work

When contacted, an M&M spokesperson said that as a matter of policy the company does not comment on future plans. Says Rajan Wadhera, chief executive, technology, product development & sourcing, M&M: "Work on a new platform should be concluded very soon and it will be on the compact side." He refused to divulge specific details. He added that the project is at the styling and customer research stage and technocommercial viability has to be established. People close to the development say the platform will be monocoque (or unibody) and the plan is to have different body shells for M&M and Ssangyong vehicles.

M&M has set up a team of over 100 engineers who are working on various functions of styling, body design, trims, vehicle integration, suspensions, engine development and cooling systems. The company is relying on value engineering and software solutions to keep development costs low.

21stSudden surge in India's exports to Bahamas raises doubtsNEW DELHI: An amazing surge in India's exports to the Bahamas has stoked the lingering suspicion that a slice of the country's trades is sham transactions done to bring back money stashed in secret accounts with offshore banks.

In just two years, exports to the Bahamas - best known as a tax haven - have shot up from $2.2 million in 2008-09 to $2.2 billion in 2010-11, according to commerce department data. The number in no way matches the data on the Bahamas' global imports, which according to UNCTAD - the global trade and investments monitoring agency - was $2.8 billion in 2010.

According to the CIA data base, India has only a 7.5% share in the Bahamas' imports, which works out to about $200 million in 2010. The wide gap, some think, is more than sloppy statistics. "This is just a way of bringing black money back into the economy when it needs to be converted into white money and used for other purposes such as investments," said an economist on the committee appointed by the government to suggest ways to curb black money.

This happens through export 'over-invoicing', which boils down to billing the overseas buyer $10 million for cargo that may be worth just $10,000. In such transactions, the buyer may be fictitious, or a shell or front company of the Indian exporter. It's a ploy to bring back undisclosed money under the garb of cross-border trade. Biswajit Dhar, a trade expert and director-general of RIS, a think tank, felt the government should be looking at these indicators of black money. "They should also look at a detailed list of exporters... I'm sure some of them are fictitious," he said.

The Bahamas is one of the jurisdictions to have signed a tax information exchange agreement with India. Some of the others include Bermuda, Isle of Man, British Virgin Islands and Cayman Islands. As per the information exchange pact, the countries are required to share information if the other country has reasonable ground to believe that there has been a tax offence. Under the circumstances, Indian residents holding money in banks in Nassau, the capital of the Bahamas, may think it's safer to either move their money to another destination or bring it back to India.

Difficult to Explain Jump

Nassau is a favourite tax haven for many wealthy Americans. While the Bahamas, a nation of 29 islands, is also a transshipment point, it's difficult to explain the sudden jump in exports from India. During April-December 2010, India's exports to the Bahamas were up 217% to $1.6 billion from the year-ago period.

For the last few months, analysts have raised eyebrows on India's export numbers. More so, at a time the US and Europe - the two biggest markets - are facing slowdown. While some have attributed this to inept data handling, a recent report by Kotak Institutional Equities Research has harped on the possibility of black money inflow. The report, authored by Sanjeev Prasad, Sunita Baldawa and Amit Kumar, draws no definitive conclusions, but said, "We can attribute some part of these gaps to data limitations but the large difference between official data and our observations begs a better and more sophisticated explanation."

It highlights how export data of major engineering companies, including automobiles and metals, does not match the steep increase in official export numbers. For instance, according to official data, engineering exports grew 79% year-on-year in 2010-11 while the export numbers compiled from respective figures reported by BSE 500 show a mere 11% increase. This gap could be as much as $28 billion. If this cannot be explained as a miracle export story of small, unsung companies, then the data mismatch casts a shadow on the GDP growth. Some like Sajjid Chinoy, JPMorgan's India economist, feels the concern relating to "over-invoicing" of exports could be overblown. Chinoy, who

compared the official export figures with port traffic data, recently told The Economist magazine that the "conspiracy theories are flimsy".

But Nisha Taneja, who specialises in international trade at the Indian Council for Research and International Economic Relations, said the large discrepancy (in the data on export to the Bahamas) is a clear indicator of black money, even though more investigation is needed. The biggest component of India's exports to the Bahamas in 2010-11 was mineral fuels, at $1.9 billion, according to government data.

Experts say the government should improve its monitoring mechanisms to ensure lawful shipment of goods, economists believe. "In order to curb the flow of black money through the overinvoicing route, the government should ensure that the value of exported goods on paper matches the actual value," said Abhijit Das, director of the WTO centre at the IIFT. "This would require stepping up of efforts by customs authorities," he said.

Ajay Sahai, director-general of the Federation of Indian Export Organisations, said it is unlikely that formal channels could be used misused to this extent. "I don't think this difference can be attributed to black money. It could be because of different accounting mechanisms used by the Bahamas."

22nd

Maruti Suzuki set to run again as management, workers call truce

 NEW DELHI: Maruti Suzuki is likely to return to normal operations on Saturday as agitating workers have signed a fresh comprehensive agreement with the management, which has agreed to take back majority of the 94 suspended staff.

Softening its stand, the Maruti management has also decided in principle to re-employ 1,100 contract workers in phases, which had been the main trigger for the latest strike at the country's largest carmaker. The company said normal operations at the Manesar plant would resume from Saturday as workers have agreed to re-start production from the morning shift.

Maruti Suzuki Chairman RC Bhargava told ET: "I have confidence that the resolution we have arrived at will not lead to disruptions in the future."

On the core issue of recognition of the proposed union by workers at the Manesar plant, Bhargava said, "Whatever issues the workers have, including formation of the new union, will be dealt with by the committee that we are setting up."

Maruti will form two new forums under the Industrial Disputes Act within the Manesar plant - Grievances Redressal Committee & Labour Welfare Committee - that will take stock of all micro issues within the plant on a periodic basis. This new initiative aims to improve communication with the workers and also look into the issues raised inside the plant.

As per the new agreement, Maruti will take back 64 employees, and the rest of the 30 permanent staff facing serious charges will face a time-bound inquiry. The management plans to complete inquiry against all the 30 employees in the next 10 working days to maintain a congenial atmosphere within the factory and gain confidence in its industrial policies.