Hyderabad's IT industry welcomes Telangana move (India's 29th state)

Hyderabad, July 31: After over three years of uncertainty, the Information Technology industry here heaved a sigh of relief with Tuesday's announcement by the Congress party to carve out a separate Telangana state out of Andhra Pradesh. The announcement has cleared the air over the future of Hyderabad, a major IT destination in the country. This fast growing metropolis will be the joint capital of Telangana and Andhra Pradesh for 10 years. Andhra Pradesh is expected to build its own capital within that period


The IT industry welcomed the decision, saying it brought an end to uncertainty and brightened the prospects of the city attracting new investments. The industry with software exports to the tune of Rs.40,000 crore was worried over frequent shutdowns and spells of violent protests for separate Telangana state. This had taken sheen off brand Hyderabad. "I believe the decision has brought in a positive sentiment as the uncertainty surrounding the matter has finally been resolved," said V. Laxmikanth, managing director, Broadridge India. "Hyderabad, known for its large pool of talented IT professionals and as a base for leading MNCs, is expected to reclaim its reputation of being the destination of choice for businesses across industries," he said. B.V.R. Mohan Reddy, chairman and managing director, Infotech Enterprises, said while he was not for or against the decision, he was anxiously looking forward for this decisive movement. "The separation problem has been voiced for the last 50 years but in the last three years some of these agitations have been (hurdles) for progress of the state. The uncertainty has slowed down the growth. That is now past." Suman Reddy, vice president and managing director, Pegasystems India, hoped the development will bring back stability in the business environment of the city. "Growth and expansion from the perspective of IT MNCs investing in the state had been stalled/relatively slow due to this issue, which hopefully will Resume after the decision is announced," he said. Hyderabad, which emerged on the world IT map only in mid-1990s, is home to over 1,000 IT and ITeS companies including global majors like Microsoft, Google, Facebook, Dell, Oracle and Amazon. The IT and ITes sector provides nearly five lakh jobs.
Read more at: http://news.oneindia.in/2013/07/31/hyderabad-it-industry-now-breathes-easy-telangana-andhra-pradesh-1272698.html

Indian Govt to further liberalise FDI policy

The government will further liberalise and bring in more clarity to the overseas investment policy to attract foreign funds that will help tackle the current account deficit, finance minister P Chidambaram said on Wednesday.

Addressing a press conference on his completing one year as finance minister, Chidambaram said the government is “actively considering liberalising FDI” policy.

Chidambaram's comments came less than two weeks after the government liberalised FDI policy for various sectors, including telecom, insurance, defence and retail.

The finance minister said the government would soon bring in more clarity to the foreign direct investment (FDI) regulations in multi-brand retail which would help attract investments into the sector.

"The commerce ministry is in the last leg of clarifying the policy,” he said, adding the proposal is likely to be placed at Thursday's cabinet meeting.

The government last year had opened the gates to foreign investors in multi-brand retail allowing up to 51% FDI.

However, no foreign investment has taken place in the sector so far.

Chidambaram hoped that the overseas investors would enter into the Indian multi-brand retail markets, once the issues were clarified. “FDI in multi-brand retail is being held back because there are some pertinent questions.”

Chidambaram, who took charge of the finance ministry Aug 1, 2012, said the government was also considering a number of steps to help curb current account deficit that surged to a record high of 4.8% of the country's gross domestic product (GDP).

"We are looking at some compression in non-oil and non-gold import to curb demand for non-essential luxury items,” he said.

The finance minister expressed confidence that government would be able to finance the current account deficit.

"We have already financed current account deficit by $88 billion (in 2012-13)...We will be able to fully finance current account deficit this year too,” he said.

Other measure under consideration to curb current account deficit include liberalisation of external commercial borrowings (ECBs) norms and attracting investments from NRI deposits, pension funds and sovereign wealth funds.

On sovereign bonds, Chidambaram said: “Sovereign bond issue is an option on the table, but I will not rush into any decision.”

RBI governor D Subbarao on Tuesday had opposed the idea of issuing sovereign bonds saying it was not good for long-term financial stability of the country as it would make Indian economy more vulnerable to external shocks.

On the rupee, Chidambaram said the recent depreciation in the Indian currency was “quite unexpected”.

"There is no level for the rupee, what we want is a stable currency,” he said.

The rupee slipped to 61.18 against a dollar Wednesday, a day after the Reserve Bank of India (RBI) left all key policy rates unchanged. The Indian currency is nearing the record low of 61.21 hit earlier this month.

China Removes Floor on Lending Rates as Economy Slows

China eliminated the lower limit on lending rates offered by the nation’s financial institutions as growth slows and authorities expand the role of markets in the world’s second-biggest economy.

The change, effective today, removes a floor set at 30 percent below the current 6 percent benchmark, according to a People’s Bank of China statement yesterday

While the move temporarily jolted world stocks higher, the PBOC acknowledged that it was a limited step and said that freeing up deposit rates would be more important. The shift came as central bankers and finance ministers from Group of 20 nations gathered in Moscow, and after a cash squeeze in money markets curbed a record expansion in China’s credit.

“While deposit-rate liberalization is still possible, the fact that a decision was made to just remove the lending-rate floor suggests that more aggressive liberalization proposals were defeated, or at least delayed,” said Ken Peng, senior economist at BNP Paribas SA in Beijing. “This decision shows that some reform is being done, but may actually reduce the chances for deposit-rate liberalization in the near term.”

Raising the deposit-rate ceiling would improve household incomes and reduce the attractiveness of non-traditional wealth management products while threatening banks’ profit margins, Peng said.

China is not yet ready for freeing up deposit rates, the “most risky” part of interest-rate liberalization, the PBOC said, adding that the nation lacks a deposit insurance system.
Right Timing

There’s no consensus on deposit-rate reform, Song Guoqing, an academic adviser to the central bank, said today.

“Some people said the timing is right, others said it’s not, there is no unified view,” Song said at a conference in Beijing. “Had there been a unified view, it would have been announced yesterday.”

The change will lower companies’ funding costs and boost financial institutions’ pricing capabilities, the PBOC said. In the first quarter, only about 11 percent of loans were priced below the lending benchmark, according to central bank data.

China will maintain the floor for mortgage rates because the government will continue to curb speculative home buying and investment, the PBOC said. It will remove the cap on lending rates offered by rural cooperatives and also scrap controls on bill discounting rates.

http://www.bloomberg.com/news/2013-07-19/china-removes-floor-on-lending-rates-offered-by-nation-s-banks.html

Honda’s Fujino Readies ‘Flying Acura’ to Challenge Cessna

Michimasa Fujino began working on Honda Motor Co. (7267)’s aviation project 27 years ago at a hangar in Mississippi. Next year, Fujino, now president of the aircraft unit, says the project may finally get off the ground.

If so, Tokyo-based Honda would become the first newcomer to get U.S. approval in the $21 billion business-jet market since 2006. That would pit the carmaker against market leadersTextron Inc. (TXT)’s Cessna and Brazil’s Embraer SA (EMBR3), who have fended off threats from companies such as Bill Gates-backed Eclipse Aviation, which sought bankruptcy protection five years ago.

Though delivery of the HondaJet hasn’t started, Fujino said he has clinched two to three years of orders for the $4.5 million plane and signaled the business will turn profitable before the end of the decade. The seven-seater plane, which Fujino calls a “flying sports car” or “flying Acura,” will be 15 percent more fuel efficient, have roomier cabin space and fly 10 percent faster than comparable aircraft, he said.

Skeptics abound.

“There are no newcomers to business aviation, only cautionary tales,” said George Tsopeis, vice president at Montreal-based Zenith Jet, an aviation advisory firm. “If Honda manages to bring the HondaJet to market, that alone will be an accomplishment.”
Aviator Glasses

Wearing aviator-style prescription glasses, Fujino said he expects the unconventionally designed jet -- the engines are on top of the wings -- to get clearance from the U.S. Federal Aviation Administration by next year.

He has said that before. Honda has delayed the debut of the plane every year since targeting deliveries in 2010 for reasons ranging from difficulties procuring components to parts damage caused by ice. The company says it’s getting closer, in May announcing that its fifth FAA-conforming HondaJet successfully completed its first flight.

To get permission from the FAA, a manufacturer must demonstrate that the plane meets U.S. regulations on everything from the strength of the wings to how it lands in a crosswind. Most of the process is conducted behind closed doors because the test data and designs supplied by aircraft manufacturers are considered proprietary and confidential.

Certification is a “long and arduous process” that typically involves testing four to five aircraft for 2,000 flight hours, Tsopeis said. Once a company gets the nod from the FAA, it becomes easier to win certification from other aviation jurisdictions, he said.
Founder’s Dream

The FAA doesn’t comment on pending aircraft certification, it said in an e-mailed statement. Representatives at Cessna and Embraer didn’t respond to e-mails seeking comment.

The start of deliveries would fulfill the wishes of the company’s late founder, Soichiro Honda, who died in 1991. Though the carmaker doesn’t expect the business to be a big profit contributor, it has pursued the project partly as a tribute to the founder, Chairman Fumihiko Ike said in an interview this month.

In the fiscal year ended March, automobiles and motorcyclesaccounted for 92 percent of Honda’s revenue and 73 percent of operating profit.

http://www.bloomberg.com/news/2013-07-18/honda-s-fujino-readies-flying-acura-to-challenge-cessna.html

Social Media for Politics in Japan allowed ?

Noise-polluting trucks with loudspeakers and politicians hoarse from giving speeches at railway stations have been a staple of Japanese elections since before the Second World War.

That may be about to change, as politicians take advantage of new laws allowing them to use Twitter Inc., Facebook Inc. (FB) and video streaming websites to campaign online.


The Twitter Inc. page belonging to Shinzo Abe, Japan's prime minister, is displayed on a computer screen. Photographer: Tomohiro Ohsumi/Bloomberg


Shinzo Abe, Japan's prime minister, delivers a speech at an election campaign rally in Tokyo. Photographer: Kazuhiro/AFP/Getty Images


Sheryl Sandberg, chief operating officer of Facebook Inc., left, and Shinzo Abe, Japan's prime minister, pose for a photograph prior to their meeting at the prime minister's official residence in Tokyo on July 2, 2013. Photographer: Franck Robichon/Pool via Bloomberg

Japan’s July 21 upper house election is the first nationwide voting since the end of a ban on candidates using the Internet to spread political messages in a nation where door-to-door campaign visits are illegal. Politicians now have a campaign tool that’s quicker, cheaper and quieter than the loudspeaker trucks.

“Online campaigning may have an impact on public opinion, and voting results could be drastically different,” said Hiroshi Naya, an analyst at Ichiyoshi Research Institute Inc. in Tokyo. “Those who aren’t familiar with online communication methods have to learn how to use them.”

Companies such as Yahoo Japan Corp. (4689) and Dwango Co. (3715), which has seen candidates tap its Niconico video streaming channel, may benefit from the new style of campaigning, Naya said.

Loudspeaker vans are legal under Japan’s Public Offices Election Act. Rules also limit the size and number of pamphlets a political group can use and where posters can be placed.
New Blogs

Prime Minister Shinzo Abe’s Liberal Democratic Party, along with coalition ally New Komeito, will probably win a majority in the upper house election, according to a July 4-5 Yomiuri newspaper poll.

Under the old campaigning rules, candidates were barred from even updating blogs or making new entries on social networks during the campaign.

The April rule change has triggered a rush of politicians starting blogs to communicate with voters.

Of the 433 candidates in the election, 121 have opened an account at CyberAgent Inc. (4751)’s Ameba blogging service. About half of them are newly created accounts since the Tokyo-based company started in April offering free consulting services for politicians to help them get used to social media, said Ayako Toba, an Ameba spokeswoman.

Septeni Holdings Co. (4293), which manages Internet advertising businesses, last month sold an e-mail authentication service to a major Japanese political party, spokeswoman Hiromi Kofunato said, declining to specify the buyer. Septeni has also begun a consulting service to help politicians open Facebook accounts.
Market Impact

Shares of Dwango have almost tripled this year and Septeni has more than doubled, compared with a 41 percent advance for the broader Topix (TPX) index. Dwango’s Niconico Internet streaming service is used by 10 political parties, according to Akiko Matsumoto, spokeswoman for the Tokyo-based company.

“Those shares started to gain on expectation that the rule change would benefit the companies,” said Ichiyoshi’s Naya.

While many candidates are still beginners in the use of social media, a notable exception is Prime Minister Abe, said Jitsuko Miyazaki, who runs Haru Consulting Inc., an Internet business firm based in Yokohama, near Tokyo.

“There is no limit to using Internet to show what you are doing,” she said. “Prime Minister Abe may be the only politician standing out for regular use of online media.”

Abe has been uploading photos and comments several times a day to his Facebook accountsince he kicked off the LDP campaign July 4. Pictures and videos from the trip include a breakfast with his wife at home, holding a supporter’s baby during a lunch break and shaking hands with shoppers as he walked through a local market.
Obama’s Twitter

More than 5,000 people gathered in Osaka as Abe gave a speech for a LDP candidate Takuji Yanagimoto, Abe’s July 6 postings show. More than 10,700 people clicked a “like” button for that posting.

While Abe’s over 153,000 Twitter followers number more than LDP Secretary General Shigeru Ishiba’s 35,000, the roster is dwarfed by the more than 34 million people who track U.S. President Barack Obama’s posts.

Yosuke Ito, a candidate for the governing Liberal Democratic Party, is among those shunning traditional methods for the election. The 49-year-old musician has been seeking votes through Twitter, Facebook, Google Inc.’s YouTube and Niconico.
That’s Entertainment

As the new rules took effect, Ito kept his blog updated with new videos and photos while also getting help from other artists that are signed with Avex Group Holdings Inc. (7860), the agency that manages his music. The dance group Exile appeared on his blog, helping it become the most popular among the 121 Ameba sites for candidates.

Ito, formerly a stockbroker, knows where he sees the value of his campaign.

“I am campaigning mainly on Internet,” Ito said in a July 8 post on Twitter. “I don’t repeat my name from an election van or scream out a speech in front of a station. I’d rather bring my passion in packets and footage that are enjoyable to all through Niconico and YouTube.”

To contact the reporters on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net; Takashi Amano in Tokyo at tamano6@bloomberg.net

To contact the editor responsible for this story: Robert Fenner at rfenner@bloomberg.net

India’s Bihar State Blames ‘Callous’ Principal for School Deaths

The source of poison that killed 23 school children last week in the Indian state of Bihar was the vessel storing cooking oil used to prepare their lunch, an official said, citing a forensic report released late yesterday.

Monocrotophos, a highly toxic organophosphate insecticide, was found in the oil container, the food and the utensil in which it was cooked, R. Lakshmanan, who runs the mid-day meals program in the state, said in a telephone interview last night. The chemical, which the U.S.stopped using in 1988 according to the website of the Extension Toxicology Network, is produced by at least 15 manufacturers in the world, according to the Pesticide Action Network’s website.

“This confirms our suspicion that the oil, or what was believed to be oil, was the source of poisoning,” Lakshmanan said in a telephone interview. He didn’t say if the food was cooked just using the insecticide or contaminated oil.

The deaths of the children further tarnished the reputation of an 18-year-old government meals program meant to feed the hungriest children in the poorest corners of India. The plan, part of a web of polices aimed at easing the malnourishment that afflicts almost half the country’s children, has been criticized by the Supreme Court and the comptroller and auditor general for corruption and inefficiencies.
Stolen Food

Graft has plagued all three of India’s major food aid programs. A Bloomberg News investigation last year showed how $14.5 billion in food meant for the poor was stolen from a rationing system and sold on the black market.

The forensic report doesn’t indicate whether the poisoning was intentional, Lakshmanan said.

About 50 to 60 children were present, seated on the building’s concrete floor, as lunch was served on July 16 around 1 p.m., relatives said July 18. Most ate off metal plates, many of which were strewn around the classroom. The meal had been cooked just outside on a makeshift stove made of bricks, which has since been destroyed during protests that followed the deaths.

A soyabean dish served to the children may have been prepared using the pesticide as a cooking medium instead of oil, the Times of India reported, citing sources in the federal human resources development ministry it didn’t name. The school principal scolded the students who refused to eat the dish because of its black color and smell, according to the report.

The condition of three children undergoing treatment in the Intensive Care Unit of the Patna Medical College hospital had improved, the hospital said in a bulletin yesterday. All the other children and the school cook were also stable and the patients were now being fed orally, it said.
‘Gross Negligence’

Lakshmanan, in a separate interview on July 19, said the tragedy wouldn’t have occurred if rules had been followed and condemned the “gross negligence” of the school principal in the village of Dharmasati Gandawan. He rejected charges the deaths represented a wider government failure.

“There has been a very callous attitude and gross negligence on the part of the headmistress,” he said in the provincial capital of Patna. “Our principals have been given detailed training as recently as April, including instructions to taste the food before feeding the students.”

Many of the grieving families in Bihar buried their dead children in the school grounds or in nearby paddy fields to protest what they said was official indifference to their loss.

http://www.bloomberg.com/news/2013-07-19/children-buried-at-indian-school-as-pesticide-is-blamed.html

Clean Energy: Green Power for Asia's Future Growth

700 million
people in Asia have no access to modern electricity

$4.8 billion
been invested in ADB projects with clean energy components from 2008-2010

71 million
tons of CO2 have been abated through ADB projects from 2008–2010

With energy demand projected to almost double in the Asia and Pacific region by 2030, there is an urgent need for innovative ways to generate power while at the same time reducing greenhouse gas emissions. Compounding the problem is widespread energy poverty across Asia with almost a billion people still without access to electricity.

As many of ADB’s developing member countries (DMCs) forge ambitious plans to meet these challenges ADB is committed to helping them achieve access to clean energy for all.

The Asia-Pacific region is the global leader in clean energy development, but there is much more that can be done to raise the level of clean energy deployment.

From 1990 to 2009, ADB provided over $25.8 billion in assistance for energy projects, extending electricity and modern fuels to hundreds of millions of people in Asia and the Pacific. ADB’s updated Energy Policy aims to promote energy efficiency and renewable energy. Clean energy investments in 2010 reached $1.76 billion with access-to-energy projects exceeding $950 million, up from $418 million in 2009. Between 2003 and 2009 such assistance connected 1.27 million households to electricity. Improving access to cleaner, renewable sources of energy strengthens energy security in DMCs and is a key to mitigating climate change

http://www.adb.org/sectors/energy/main