Global Meltdown

Impact of the Global meltdown on Business in the IT/ITES sector

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Som Mittal, President, NASSCOM for Business Today Recent developments in the US financial markets have had a direct impact on other sectors and on countries across the world. Economies like India are slightly more insulated than others owing to the tight regulatory environments, however, export industries like IT and BPO which are globally integrated industries will surely see some impact. Notwithstanding this, we will still see growth, even though it maybe a slightly lower than the 30 percent plus we have seen in the past. This industry’s foundation is human resources and growth, – linear or lateral, would necessarily mean more hiring. The impact of the slowdown may remain for a few quarters and the growth will be back. To put things in perspective, the Indian IT-BPO industry currently employs 2 million individuals directly, an increase of about 389,000 professionals over FY2007 and indirect job creation is estimated at about 8-9 million. Of these, almost 700,000 are working in the BPO sector alone and these are individuals from science and arts education background. IT services (incl. engineering services, R&D, Software products) exports, and Domestic IT industry provides direct employment to 860,000, and 450,000 professionals respectively. The average age of the employees in this industry is around 27 years. If we were to take a look at this industry’s contribution, it has taken over the responsibility of training and ‘finishing’ of the workforce – with 16-18 weeks of robust on the job training, even as India’s education system reforms itself. On an average, top ten companies hire in excess of 20,000-25,000 individuals in a year, from campuses in a staggered process, since no campus has the capability to absorb all these candidates at one go. These candidates are then trained to deliver at a global competence level. The industry then offers them a world class work environment, where they service global clients and work on cutting edge technology. These factors go a long way in adding to the experience of the individual in the long run, and are unique to our industry. In recent times, there has been a lot of skepticism regarding employment, there are certain anecdotal stories but these are topical and client specific. It is important to view these through an educated viewpoint. With the current economic downturn across the world, companies would tread cautiously. The industry will raise its entry bar. This is a combination of factors that include India’s leadership edge in this space and as a corollary, this has raised the expectations of customers and employers, and hence we need to meet the standards, if not exceed them. NASSCOM’s preliminary research indicates that although there may be a slight impact on new hires, we will continue to hire. This is good news in the current times. We have noticed certain trends that are likely to guide and set the trends for fresh recruitment in the industry. These include lowering of attrition levels by 6-7%; broadening of the manpower base - over the past five years the industry has grown from employing 430,114 in 2000-2001 to 2 million in 2007-08, thereby the percentage of new additions is tapering; and increase in productivity and utilisation levels - hires are now being made closer to deals. In terms of upcoming trends, while there may be a few specific verticals like mortgage and financial services that are directly impacted, but others like healthcare and utilities continue to grow as per the projections. The drivers of hiring in the next few quarters will include factors like ‘lack of technically equipped resources in the US’; ‘ changing demographics of the world’; ‘transformation which is happening at a rapid pace’ and ‘shortening of time to market which calls for greater competencies, that India possesses’. Source: Business Today

Mainstream, Vol XLVII, No 15, March 28, 2009

Global Meltdown and its Impact on the Indian Economy Thursday 2 April 2009, by Ruddar Datt With the collapse of Lehman Brothers and other Wall Street icons, there was growing recession which affected the US, the European Union (EU) and Japan. This was the result of large scale defaults in the US housing market as the banks went on providing risky loans without adequate security and the repaying capacity of the borrower. The principal source of transmission of the crisis has been the real sector, generally referred to as the ‘Main Street’. This crisis engulfed the United States in the form of creeping recession and this worsened the situation. As a consequence, US demand for imports from other countries indicated a decline. The basic cause of the crisis was largely an unregulated environment, mortgage lending to subprime borrowers. Since the borrowers did not have adequate repaying capacity and also because subprime borrowing had to pay two-to-three percentage points higher rate of interest and they have a history of default, the situation became worse. But once the housing market collapsed, the lender institutions saw their balance-sheets go into red. Although at one time it was thought that this crisis would not affect the Indian economy, later it was found that the Foreign Direct Investment (FDI) started drying up and this affected investment in the Indian economy. It was, therefore, felt that the Indian economy will grow at about seven per cent in 2008-09 and at six per cent in 2009-10. The lesson of this experience is that India must exercise caution while liberalising its financial sector. A redeeming feature of the current crisis is that its magnitude is much lesser than that of the Great Depression of the 1930s when unemploy-ment rate in the United States exceeded 25 per cent. Currently, it stands at 6.5 per cent and is predicted to remain around eight per cent in 2009. Impact on Indian Economy The industries most affected by weakening demand were airlines, hotels, real estate. Besides this, Indian exports suffered a setback and there was a setback in the production of export-oriented sectors. The government advised the sectors of weakening demand to reduce prices. It provided some relief by cutting down excise duties, but such simplistic solutions were doomed to failure. Weakening demand led to producers cutting production. To reduce the impact of the crisis, firms reduced their workforce, to reduce costs. This led to increase in unemployment but the total impact on the economy was not very large. Industrial production and manufacturing output declined to five per cent in the last quarter of 2008-09. Consequently, a vicious cycle of weak demand and falling output developed in the Indian economy. A weakening of demand in the US affected our IT and Business Process Outsourcing (BPO) sector and the loss of opportunities for young persons seeking employment at lucrative salaries abroad. India’s famous IT sector, which earned about $ 50 billion as annual revenue, is expected to fall by 50 per cent of its total revenues. This would reduce the cushion to set off the deficit in balance of trade and thus enlarge our balance of payments deficit. It has now been estimated that sluggish demand for exports would result in a loss of 10 million jobs in the export sector alone. To lift the economy out of the recession the Government announced a package of Rs 35,000 crores in the first instance on December 7, 2008. The main areas to benefit were the following: (a) Housing—A refinance facility of Rs 4000 crores was provided to the National Housing Bank. Following this, public sector banks announced to provide small home loans seekers loans at reduced rates to step up demand in retail housing sector. (i) Loans up to Rs 5 lakhs: Maximum interest rate fixed at 8.5 per cent. (ii) Loans from Rs 5-20 lakhs: Maximum interest rate at 9.25 per cent. (iii) No processing charges to be levied on borrowers. (iv) No penalty to be charged in case of pre-payment. (v) Free life insurance cover for the entire outstanding amount. This means a borrower can get a loan up to 90 per cent of the value of the house. The government hopes to disburse Rs 15,000 to 20,000 crores under the new package.

The housing package is the core of the government’s new fiscal policy. It will give a fillip to other sectors such as steel, cement, brick kilns etc. Besides, the small and medium industries (SMEs) too get a boost by manufacturing all kinds of fittings and furnishings. The success of the housing package will, however, depend on the State governments efforts to free up surplus land so that land prices come down and the cost of housing becomes reasonable. (b) Textiles—Due to declining orders from the world’s largest market the United States, the textile sector has been seriously affected. An allocation of Rs 1400 crores has been made to clear the entire backlog in the Technology Upgradation Fund (TUF) scheme. The Apparel Export Promotion Council (AEPC) Chairman, however, said: “It is a disappointing package. The allocation of Rs. 1,400 crores has been pending for many years and thus, it is the payment of arrears only. There is nothing new in it. It would have been much better if more concrete measures have been taken to reverse the downturn in the exports of readymade garments and avoid further job losses in the textile sector.” (c) Infrastructure—The government has been proclaiming that infrastructure is the engine of growth. To boost the infrastructure, the India Infrastructure Finance Company Ltd. (IIFCL) has been authorised to raise Rs 14,000 crores through tax-free bonds. These funds will be used to finance infrastructure, more especially highways and ports. It may be mentioned that ‘refinance’ refers to the replacement of an existing debt obligation with a debt obligation bearing better terms, meaning thereby at lower rates or a changed repayment schedule. The IIFCL will be permitted to raise further resources by the issue of such bonds so that a public-private partnership (PPP) programme of Rs 1,00,000 crores in the highway sector is promoted. (d) Exports—Exports which accounted for 22 per cent of the GDP are expected to fall by 12 per cent. The government’s fiscal package provides an interest rate subsidy of two per cent on exports for the labour– intensive sectors such as textiles, handicrafts, leather, gems and jewellery, but the Federation of Indian Export Organization (FIEO) felt the measures are not enough as they will not make the exports pricecompetitive and, therefore, will not boost exports. G.K. Pillai, the Commerce Secretary, has estimated a loss of 1.5 million jobs in the export sector alone during 2008-09 on account of the $15 billion decline in the expected exports. (e) Small and Medium Enterprises (SMEs)—The government has announced a guarantee cover of 50 per cent for loans between Rs 50 lakhs to Rs 1 crore for SMEs. The lockin period for loans covered under the existing schemes will be reduced from 24 months to 18 months to encourage banks to cover more loans under the scheme. Besides, the government will instruct state-owned companies to ensure prompt payment of bills of SMEs so that they do not suffer on account of delay in the payment of their bills. In short, the fiscal package is aimed at boosting growth in exports, real estate, auto, textiles and small and medium enterprises. The aim is to encourage growth and boost employment which have been threatened by the recession in the world economy, more especially in the United States. Just within a month, the government announced another package to bail out the Indian economy. Dr Montek Singh Ahluwalia said: “We should expect, from all global projections that the next year (2009) is going to be a very difficult year for the global economy.” The purpose of the new package announced on January 1, 2009 was to minimise the pain. With this end in view, the new package included the following measures:1. To boost investment and spending to revive growth, the RBI cut the repo rate, which it charges on shortterm loans to banks from 6.5 per cent to 5.5 per cent and also reduced the Cash Reserve Ratio (CRR)—the share of deposits which has to be kept with the RBI from 5.5 per cent to five per cent. 2. To revive exports which has resulted in a contraction of industrial output, drawback benefits have been enhanced for some exporters. Export-Import Bank also gets Rs. 5000 crores as credit from the RBI. 3. To help the realty sector, realty companies have been allowed to borrow from overseas to develop “integrated townships”. 4. To boost infrastructure, the India Infrastructure Finance Company Ltd. (IIFCL) has been allowed to raise Rs 30,000 crores from tax-free bonds. Besides, Non-Banking Finance Companies (NBFCs) need no government approval to borrow from overseas for infrastructure projects. This will sustain the growth momentum on infrastructure. 5. To make more funds available, ceiling on foreign institutional investments (FIIs) in corporate bonds has been increased to $ 15 billion from $ 6 billion. The purpose is to seek much bigger FII investment. 6. To stimulate the Commercial Vehicles (CVs) sector, depreciation benefit on commercial vehicles has been increased form 15 per cent to 50 per cent on purchases. Besides, the States will get one-time funding from

the Centre to buy buses for urban transport. In addition, public sector banks would provide finance firms funds for commercial vehicles. It is hoped that Tata Motors and Ashok Leyland’s sales would revive. On February 24, 2009, the government announced a slashing down of excise duty from 10 per cent to eight per cent—a reduction by two per cent. Since 90 per cent of the manufactured goods attract 10 per cent excise duty, this measure is designed to reduce the prices of colour TV sets, washing machines, refrigerators, soap, detergents, colas, cars and commercial vehicles. Cement prices are likely to drop Rs 4-5 per bag of 50 kg while steel prices may cost Rs 500-600 per tonne less. In addition to this, the government decided to cut service tax form 12 per cent to 10 per cent—a reduction by two per cent. As a consequence, phone bills, airline tickets, credit card charges, tour packages etc. would cost less. A two per cent reduction in service tax will directly touch the lives of over 500 million persons by reducing monthly expenses. The entire stimulus package of Rs 30,000 crores to boost demand in the economy and thus reduce the impact of recession. Commerce and Industry Minister Kamal Nath announced a small relief package of Rs 325 crores for leather, textiles, gems and jewellery on February 26, 2009. Assessment of the Impact of the Fiscal Package There is no doubt that the government is motivated with good intentions and is thus aiming to spend a huge amount of Rs 1,00,000 crores for developing infrastructure in roads, ports etc. which pose a serious handicap to growth. Besides, the aim of other measures is to boost exports and help sectors like textiles and small and medium industries which are labour-intensive and generate more employment. But the success of the fiscal package will depend on the quality and speed of implementation so that delays in implementation may not aggravate the economic recession to move into the dangerous zone of depression. One of the major stumbling blocks which may neutralise the positive effects of large expenditure on infrastructure is corruption. In case corruption is not simultaneously curbed to reasonably low levels, it may delay and reduce the much-desired effect in enlarging infrastructure. It may result in the Indian infrastructure network being geared into a temporary employment generation programme with much smaller impact on the economy as against the intended objectives. For reducing corruption, two things need to be ensured—transparency and avoidance of arbitrariness. By cutting arbitrariness in decision-making, corruption can be curbed to a great extent. Transparency instills confidence in the government. Secondly, there is a need to orient the fiscal package towards inclusive growth so that the weaker sections benefit. This would require special emphasis, for instance, on rural infrastructure—rural roads and housing, instead of only highways and urban housing. Similarly, a much larger expenditure on primary and secondary education, health and sanitation can also result in a more inclusive growth process. Thirdly, the chances of our exports increasing are very limited unless the G-3 economies, namely, the US, EU and Japan, are able to bring about a positive shift in their growth in the near future for which the predictions at present are not very optimistic. The World Bank has projected the world output to grow at 0.9 per cent in 2009 as against 2.5 per cent in 2008. If these predictions come out to be true, there is a fear of the recession in 2008 turning into a depression in 2009. But the Indian economy is predicted to grow at about seven per cent in 2008 and about six per cent in 2009. Since the G-3 economies of the US, EU and Japan are affected seriously by the present recession, the chances of Indian exports increasing in these countries appear to be very dim. The natural conclusion is that the Indian economy should concentrate on developing the domestic market. Thus, inward looking policies should be preferred as against the outward looking approach of integrating the Indian economy to the world economy is followed during the last decade. It is heartening that the Prime Minister intends to insulate the Indian economy from the world economy. Fourthly, although there is a demand for a much larger Fiscal Package to bail out the Indian economy, there are serious limitations faced by the government because it has to fight terrorism on the one hand and financial meltdown on the other. The government has to undertake a huge expenditure at the Central as well as State levels to enhance security. It is difficult to precisely estimate this expenditure at this stage since it entails larger recruitment of police and paramilitary forces along with equipping them with the most uptodate weapons. But there is a massive increase in expenditure to combat terrorism, along with a fiscal package to boost the Indian economy; there is also likely to be shortfall in tax revenues. Consequently, the Budget deficit is bound to increase. The government will not be able to reduce the fiscal deficit to 2.5 per cent of GDP, it may increase to three to 3.5 per cent during 2008-09. But this is inevitable and the target of reducing it according to the schedule prescribed by the Fiscal Responsibility and Budget Management Act, has to be postponed. But the Finance Minister has not agreed to the abolition of the FRBM Act since it would

be imprudent to relax or abrogate the FRBM. To quote Dr Ishar Ahluwalia: “The FRBM is like a chastity belt, but don’t loosen it without a better alternative.” It may, however, be mentioned that the quasi fiscal deficit (the deficit left out of the Budget) is presently estimated as six per cent of the GDP. A compre-hensive view of the fiscal deficit (as shown in the Budget and kept outside the Budget) would be in the range of nine to 9.5 per cent of the GDP, though it may now be lower due to a very sharp decline in international crude oil prices from $140 per barrel to about $ 40 per barrel at present. This is a welcome relief. If the government is also able to push the fertiliser prices to lower levels which is possible in the changed circumstances, eventually the total fiscal deficit (shown as well as kept outside the Budget) may come down to 6.5 to seven per cent of the GDP. This is quite large but it is inevitable in the present situation. To conclude: As against the US package of $ 800 billion to bail out the US economy and the Chinese package to $ 580 billion to salvage its economy, the Indian fiscal package of Rs 35,000 crores ($ 7.3 billion approximately) is a small measure to boost the Indian economy. It is due to this reason that the chieftains of industry want a much bigger package to bail out the Indian economy, as against the minuscule announced by the government. But the plan to spend more on housing is commendable if it can be implemented in a short time and an effective manner. The government should have transparency and avoid arbitrariness in the implementation so that corruption can be kept within reasonable limits. The government has been provided relief with the sharp fall in the international price of crude oil and this should be taken advantage of in reducing expenditure to subsidise oil imports. Additional employment generation by helping SMEs will be a step towards inclusive growth since they are labour intensive. The intention to create infrastructure by expanding highways and ports and to spend Rs 1,00,000 crores through the IIFCL is commendable. However, it may be more prudent to expand rural roads and rural housing so as to promote more inclusive growth. This would require proper planning which may take more time and does not provide immediate benefit. It may not be possible to reduce the fiscal deficit during 2008-09 since much larger expenditures are needed to combat terrorism and as there is recession in the Indian economy, but international factors will influence the process. As the G-3 economies of the US, EU and Japan pick up, the Indian economy will also benefit from their reversal of recessionary trends. In this situation, the expectation of seven per cent growth of the GDP in 2008-09 and six per cent in 2009-10 reflects a fairly good performance of the Indian economy. Now that the three packages have been announced, it is high time that the policy-makers in the Ministry of Finance, Commerce, Industry and Rural Development should get together to ensure that the planned expenditure—budgeted and provided in the two stimulus packages—is quickly translated into productive capacities so as to create the much-needed multiplier effect on private investment. It is easier to provide funds, but it is more difficult to ensure their speedy and proper utilisation. In infrastructure, we suffer from inordinate delays and this results in cost overruns which the nation has to bear. The huge amount of funds placed with the India Infrastructure Finance Company Ltd (IIFCL) would require identification of new projects or expansion of the existing projects. This is not an easy task because the IIFCL is only a funding agency and implementation has to be carried out by other entities, may be the State governments, public sector undertakings or private sector corporations. To upgrade the level of infrastructure spending by a factor of two requires gigantic efforts of co-ordination between different agencies for speedy implementation. The government should, therefore, concentrate its efforts to remove hurdles in the path of implementation. The package has also provided finances to the non-banking finance companies (NBFCs), but there is serious lack of skill with the NBFCs on project appraisals and to ascertain the credit-worthiness of the borrowers and the accompanying project risks. There has to a national campaign for training the NBFCs in project appraisals. Similarly, the State governments must improve the share of their implementation and co-operate with the Central Government to improve various infrastructure projects in their domain or in collaboration with the Centre. It needs to be emphasised that implementation holds the key to bail out the Indian economy from the economic crisis. Pranab Mukherjee has suggested that to reduce the pain of recession, employers should cut wages all along the line to reduce costs, rather than retrenching workers and thus add to job losses. To quote: “Jobs must be protected even if it means some reduction in compensation at various levels.” This is a useful tool to fight

recession and it has also been tried in several countries. This suggestion should be implemented until such time that the economy gets revived. The author, a well-known economist, is a Visiting Professor, Institute of Human Development, New Delhi.

Global meltdown continues to hit tourism industry Email this

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Goa's [ Images ] international tourism inflow is likely to dwindle further with global meltdown continuing to impact the industry even in 2009. Experts feel that the international tourism will be 10 to 15 per cent less compared to last year. The year 2008 saw average 20 per cent less foreign tourists visiting this coastal state famed for its pristine beaches. "The year 2009 will be very difficult for the tourism industry because of the economic situation prevailing worldover," Platon Loizou, managing director, Jewel in the Crown holidays UK, told PTI. Loizou's firm is the largest independent tour operators from UK planning holidays to Britons. "Every happening indicates that UK's economy is in very bad shape. Economy will be bad almost everywhere in the world affecting the number of travellers," he said.

Loizou said that the year 2008 saw partial impact as people had booked packages six to nine months in advance. "This year, it will be bad because people will not prioritise the holiday on their spending list," he said. The impact has already started showing up as Monark, one of the largest chartered flight carrier, cancelled its once a week Goa operations from January 9 onwards. The operations will remain cancelled till April, this year, Loizou said. Monark had a capacity to carry 370 passengers a week which amounts to cancellation of around 5,000 seats, he said. "There are lots of Goans who live in England [ Images ]. They also are reluctant to plan their homeland visit as they think its not worth to leave their job and come here on a vacation," Loizou said. The UK contributes for the highest foreign tourist arrivals contributing for almost 50 per cent of the total chunk. "The situation will remain volatile even for this year. It will be dependent on whether world economy resurrects or remained poised at same position," Ralf de Souza, president, travel and tourism association of Goa, said. The TTAG is an umbrella organisation of the tour operators in the state. "When the other industries recover from the recession then only tourism will be in place. Holiday is not the priority," de Souza added. The state tourism industry, which has received severe setback last year, are working out modalities to augment its sagging prospects. "The tour operators will have to check what markets can be pulled in and also what we can do to salvage the industry," the TTGG president said. The industry also expects to increase its foray in the domestic market encashing on the slashed airfares in the country. "Although world economy is in crisis, the Indian economy is still surviving its growth rate. We find that the domestic market has huge potential," de Souza stated. The state tourism ministry officials said that the attempts are on to woo more tourists here. "The season is bouncing back and we expect to pick up further," Lyndon Monteiro, officer on special duty to tourism ministry, said.

Global meltdown forces relook at Indian IT industry forecast According to Mittal, 92-93% of the workforce employed by the Indian IT-BPO industry adds value to customers, while the remaining is support staff Bangalore: India’s apex IT industry body Nasscom is taking a relook at the growth forecast of 21-24% for IT and the BPO industry for the current financial year due to the global economic downturn and would come out with a clear position on it in the third week of December. “We have no basis to give a number today. We are doing our research. Why give a knee-jerk (assessment now),” President of the National Association of Software and Service Companies (Nasscom) Som Mittal said Wednesday. In December third week, Nasscom would come out with a clear picture on the impact of global slowdown on India’s IT/BPO industry, Mittal told reporters on the sidelines of a Nasscom organised IT Women Leadership Summit 2008. According to him, the top 10 listed IT companies in India have clocked 25%-plus revenue growth in dollar terms in the first six months of the current financial year over the corresponding period last year. Europe and North America accounted for 90% of revenues of the Indian IT industry, the Nasscom head said. “We are at a downturn which would impact on growth rate, and then there will be three-four quarters where growth rate will be uncertain, lower than 30%, and post-that, we will spring back,” he said. Mittal said hiring by the IT industry in the current financial year would be lower than the previous year, while there could be some company-wise job lay-offs. But such cuts are not an industry-wide phenomenon. There is no net industry job cuts, he added. According to Mittal, 92-93% of the workforce employed by the Indian IT-BPO industry adds value to customers, while the remaining is support staff. Hiring is slowing down because attrition is lower now, while efficiency is getting improved. “But people are back in the campus for (hiring) next year. If they did not have confidence to use those resources next year, then why should they go to campus and create a problem?,” he asked. In the current situation of economic slowdown, Indian companies need to invest in domain expertise and on providing transformational services, Mittal said.

Geospatial Perspectives on the Global Economic Meltdown: Industry Executives Offer Advice

By Joe Francica , Editor-in-Chief and Vice Publisher, Directions Magazine January 05, 2009 Classified Ads: Is your company Location Intelligent? Join us at Location Intelligence 2009 (Oct 5-7, Westminster, CO) where attendees learn about the most important geospatial technologies impacting the IT industry http://www.locationintelligence.net

Should you invest or pull back on your investments in geospatial technology and mobile location-based technology? Do you look beyond 2009 or take advantage of an opportunity not seen in anyone's "business" lifetime? We asked a number of executives throughout the geospatial and LBS technology sector for their perspective, and to answer this question: "What specific advice regarding geospatial technology would you offer to users and potential buyers during this down economy?" Their answers may surprise you. Gilbert Castle, Founder and CEO, Castle Consulting When I joined one of the first GIS companies three decades ago, the technology was in its infancy. Everyone was having a great time developing applications in city planning, natural resource management, etc., but we were constrained by the software and hardware available at the time. For example, polygon overlay had just been invented, a removable disk drive (the size of a large hat box) held 250k, and monitors weren't yet in color. Within five years the opposite was true, that is, software and hardware were advancing faster than our ability to create applications. The same is true today, and may forever be true. Stated differently, we have more GIS tools than we know what to do with - and not enough applications. Accordingly, my advice regarding geospatial technology is to identify applications (that may already exist in one form or another, or may not yet exist) that have excellent business potential. I happen to enjoy start-up opportunities within an established company or funded by venture capitalists, but I'm using "business potential" in a broader way. An app developed internally or externally - that significantly increases the efficiency of an existing process, or generates valuable products/services not previously available, or otherwise becomes a tool that clearly benefits an organization, will be embraced regardless of whether the organization is a company, government agency, non-profit, academic institution or other entity. The hard part is selecting the app. You have to adopt a very disciplined, business plan-like approach in order to funnel down 100 ideas to 10 really interesting prospects and finally to the one most promising app. That app then has to be executed in a cost-effective, timely, well-marketed manner, very possibly in addition to your regular duties. In the end though, the world gains an app, and the geospatial professional enjoys both bragging rights and - most importantly - full employment! Craig Harper, CEO, Apisphere We're on the cusp of a new generation of location-based applications and services that will radically change the way people work with mobile devices including cell phones, smartphones and mobile broadband-powered laptop computers. These innovations will lead

to more efficient workflows, faster decision making, and cost savings that are crucial to maximizing business opportunities and maintaining leaner budgets in these tough economic times. Most mobile messaging models are still basically "one-dimensional" in nature and have essentially changed very little during the past decade of rapid mobile subscriber growth. Users receive messages at a time and place that is not always of their own choosing, without context, or in a place where they can't efficiently act upon them. We send and forget emails, play telephone tag, and save voice messages for later reference. We waste time, miss opportunities and work too hard to actively retrieve the information we need rather than having information come to us when, where and how we need it. That's all about to change, and the change couldn't come at a more opportune time. Apisphere has coined the term "location-smart messaging" to describe a new generation of mobile applications that will expand the real-time, relevant connections and communications between friends, family and co-workers. Just as Web 2.0 transformed the Internet from static to active, essentially breathing life into lifeless pages, Apisphere's location-smart messaging aims to transform mobile messaging from one- to four-dimensional. The main difference between location-smart messaging and standard location-based service solutions is that standard solutions aren't overly smart. In other words, they can't make sense of the information they deliver in terms of what it means to the user or recipient of that information. Most LBS information is static overall which ends up costing users and businesses millions of dollars annually in wasted time. Of course, we want services that tell us how things are (weather, news), where things are (maps, directions) and what everyone is up to (Twitter, Jaiku). But why stop there? If personalization is combined with location-smarts and then integrated with pattern recognition, mobile technology becomes more intelligent and resourceful. If the combination is just right, it's possible for an individual user to anticipate future events and make better choices that have more positive outcomes. In 2009, expect to see new location-smart services that are fully integrated with the applications you use everyday such as Microsoft Outlook and Salesforce CRM. These new location-smart applications may help users find the least congested commute, warn about a snow storm, prompt users to update a report after a customer visit or even encourage people to leave on time for a flight, which all contributes back to a healthy bottom line for a business. The best advice for LBS users during the rough times ahead is to start thinking about LBS differently and look at ways to integrate this upcoming generation of services into workflows and day-to-day operations to take advantage of this new realm of possibilities. Dale Lutz, Vice President of Software Development and Co-founder, Safe Software During this economic downturn, organizations will be focused more than ever on achieving their corporate objectives as efficiently as possible. As geospatial technology can significantly improve productivity and provide users with the information they need to make informed decisions, these tools will play an important role in helping organizations to accomplish more with fewer resources. By having access to the right geospatial technology whether that means investing in new tools or optimizing the use of existing ones -

organizations will be able to operate more efficiently and better manage their performance during the current economic situation.

Bryan Mistele, Co-founder, President and CEO, INRIX Embrace technology. Whether the economic outlook is positive or not so positive, technology can help you in many ways and in virtually all aspects of your daily life. Certainly, as the economic outlook has a big question mark next to it, the time is now to embrace the technologies that can improve your productivity and save you time and money. With the scores of innovations and the growing consumer and business acceptance of technologies like location enabled services it is more imperative than ever to take advantage of these advances. Location based services that help to navigate the geospatial world in which we live directly give the user an opportunity to save time and money and will become more relevant in the future uncertain economic environment. Geospatial navigation efficiencies can be achieved in many ways but in all cases can improve productivity and save time and money. The average American spends half of his time in the car each week fighting some sort of traffic congestion. At INRIX our mission is to reduce traffic congestion through better information delivered to drivers. We are achieving this through providing real-time and predictive traffic data to navigation devices. A further enhancement of our routing technology now enables a driver to take advantage of our third generation routing engine that delivers a Smart Route based on our traffic data. Even the most fuel efficient cars are not fuel efficient when stuck in traffic. Technology can improve efficiencies and with the growing number of cars and trucks navigating the highways and bi-ways it is imperative to take advantage of our ability to better navigate the geospatial environment. Yes, embrace technology in good times and in bad. Steven Ramage, Business Development Director, 1Spatial I would turn this question on its head and actually ignore the technology to start with and look at what organizations could and should be doing, irrespective of the economic downturn. Therefore I would reword the question as: "How can we make best use of our investment in geospatial data, software and training, and undertake continual reviews to ensure a satisfactory return on that investment?" If you are in a position to understand your key capital expenditure or operating expenses relating to these elements, or at least know where to obtain that information internally, then you will know where and how you can tighten your financial belt. This represents good business practice regardless of the economic conditions. Once you understand the costs and benefits associated with your geospatial assets, then you can make informed decisions about more effective use of the available technology. Another approach to understanding your assets is being able to measure the quality of what you have; in today's business this usually relates to a large investment in digital geographic information. If you can use geospatial technology to assess, measure and report on data quality, this will help you make informed business decisions in any economic climate. It will also help with continual reviews in terms of your organization's investment.

As an example, data integration or data migration projects - pulling together data from multiple sources or upgrading your base reference mapping - can be costly. Establishing the state of the data from the outset, and providing a quantitative assessment of data quality will help you estimate the scale of the project and whether or not it is feasible in the allocated time frame and budget. There can be many hidden costs associated with using geospatial technology if the data are of poor quality. These costs are incurred as a result of necessary tasks, such as extensive manual data correction, data translation and transformation, sending data offshore and going through a long-winded, costly process to send data back and forth between third-party contractors. For many organizations data quality is a one-off activity and this can be very time consuming and costly. It is also a short-term fix since "data creep" allows errors and problems back into the data. I would advocate that the "forgotten common sense" of doing things correctly the first time is more important than ever, given the current economic climate. This includes using geospatial technology to address data quality as an iterative process. Doing so should help organizations with their business analysis, planning and decision making. To summarize, across the mainstream IT sector it's all about the data and leveraging and sharing those data to make better decisions and have a real economic impact on the business bottom line. From a technology standpoint there is a visible move toward component architectures (Web services) to allow efficient joining or coupling and reuse of existing systems. These are producing new and more relevant business workflows without the widespread and costly re-engineering of IT systems and a growing number of organizations in the geospatial sector are also embracing this trend. Bob Samborski, Executive Director, the Geospatial Information & Technology Association (GITA) It's no secret that the infrastructure and the geospatial industry have taken a huge economic hit this fall, which has been preceded by horrific statistics about the crumbling infrastructure. GITA is in great shape to weather the tough times, and I am positive and hopeful for the future of geospatial solutions for infrastructure. I encourage geospatial practitioners to be hopeful and ready for things to turn around, as it may happen sooner than some people expect. Recent headlines have supported GITA's optimism. President-elect Barack Obama has unveiled a plan to launch a massive infrastructure program to help turn the economy around and provide jobs. It's been 50 years since the U.S. has seen plans to invest such a large amount of money in the infrastructure. The stock market may be in a shambles, but this news was enough to make companies associated with infrastructure and large construction projects feel more positive about the near term. With that amount of money funneling through the infrastructure, there will be competition. These headlines are a call to action for user organizations to build solid business cases for geospatial technology and show how geographic information systems and other solutions can enable significant and cost-effective progress. Beyond technology, knowing the right people who can get things done is absolutely crucial. Building a network of vendors and other user organizations, whether local or international, is a critical component of a "go forward" plan. Obviously, everyone is somewhat limited financially right now, but the return on investment for getting involved far outweighs the consequences of not learning and not being prepared. We need a solid infrastructure to attract investment and remain competitive globally, while

maintaining the standard of living that we have come to expect. It may be tempting to hunker down, but people need to stay in tune with the industry, and building a consensus on addressing our infrastructure challenges and then leveraging geospatial technology to solve these problems should be a common goal. Gary Smith, Principal, Green Mountain Geographics

include:

I think we need to concentrate on those applications where GIS can really be of service, save money and contribute to the economic recovery. Key areas

1. Infrastructure - roads, bridges, new high speed rail locations, etc. 2. Energy - wind turbine sighting, solar sighting, electrical distribution, etc. 3. Global health and food production - pandemic monitoring and planning, drought and famine monitoring and mitigation, local food production and distribution Local food production opportunities need our attention. Why do I see ads for California milk in Vermont? Can it really be less expensive? That being said, I think the only crop in New England for which we are self sufficient is cranberries. GIS can show these opportunities. We need to make sure future agricultural policies take advantage of GIS technology. GIS folks need to speak up and make sure the general public knows what we can do. We need to talk with legislators and policy makers, befriend the media. Sit quietly, and we will suffer. Speak up and we can have a serious impact. Let's be creative! Finally (and unfortunately), we cannot lose sight of Homeland Security issues and planning. Hopefully we will see serious 3D plume analysis come to the forefront in GIS, but this is going to mean having the 3D environment ready to go. Right now, we don't... We need to be looking ahead and advocate for our needs. Dean Stoecker, President and CEO, SRC Savvy business leaders will invest in contemporary geospatial tools in tough economic times like these because they realize that speed of spatial analytics (for building, delivering and calibrating site location models, as just one of many examples) really does matter when isolating opportunities and mitigating risks. Today, these contemporary tools do exist and are hundreds, if not thousands, of times faster than traditional map-based GIS packages. If you had a geospatial technology that did the work of five people, investing would be a simple decision.

Global meltdown modernisation’

not

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India’s

military

NEW DELHI - The global meltdown will not impact on India’s military modernisation that envisages the purchase of hardware worth Rs.1.4 trillion ($30 billion) over the next five years, a top official said Monday. ‘The global meltdown is a reality but India’s military modernisation will continue as before. There is no question of scaling down our modernisation plans,’ Secretary (Defence Production) Pradeep Kumar said. He was addressing a press conference here ahead of the bi-annual Aero India military air show at Bangalore Feb 11-15. Given the fact that one-third of the value of all military deals has to be reinvested in the country, the air show has attracted a record 592 exhibitors - 303 from 25 countries and 289 from India - making the seventh edition of the event the biggest yet, Kumar pointed out. ‘The offsets (reinvestment) policy provides a tremendous opportunity for foreign manufacturers and events like Aero India provide them the ideal opportunity to establish business-to-business contacts,’ he added.

‘Aero India will provide an ideal window of opportunity for companies to not only network with the Indian industry but also to benefit from the sharing of expertise in the fields of R&D production and product support with other global players,’ Kumar maintained. Towards this end, 153 meetings have already been fixed via a web portal launched by the defence ministry, which is organising the air show in tandem with the Confederation of Indian Industry (CII). ‘Many more are in the pipeline and the number could swell considerably by the time the show opens,’ Kumar said. The bulk of the foreign participation - 31 companies each - is from Germany and France, followed by Britain (26), Russia (24), the US (22), Italy (19), Belgium (17), Israel (11) and Australia (10). A number of foreign aircraft including the F-16, F-18, MiG-35D, Eurofighter, C-17, Embraer 135 business jet, C-130J, Citation XLS, AN-12 Cargo and A-310 MRTT, will be on display. Indian aerospace major Hindustan Aeronautics Limited (HAL) will showcase the indigenous Intermediate Jet Trainer (IJT) and Dhruv Advanced Light Helicopter, as also the BaE Systems Hawk Advanced Jet Trainer (AJT) it is building under license. With the covered area at the show spread over 44,000 sq metres, another 4,000 sq metres have been set aside for the static displays. Defence ministers from eight countries - Bolivia, France, the Maldives, Mongolia, Oman, Peru and Surinam will converge on Bangalore for the show. Besides, high-level delegations from 40 countries will witness the show. China will be represented for the first time through a token 10-member delegation. ‘I would not read too much into this,’ Kumar replied when asked whether this was a sign of the growing warmth between the two militaries.

Background Dyestuff industry plays an important role in the economic development of a country. The Indian Dyestuff industry, which was primarily started to cater to the needs of domestic textile industry, now not only meets more than 95%requirement of the domestic market, but has gradually also made a dent in the global market. All ranges of dyes such as disperse; reactive, vats, pigments and leather dyes are now being manufactured in India. This industry forms an important link in the chain of other chemical industry such as textiles, leather, plastic, paper, packaging, printing inks, paints and polymers etc. The textile industry is the major consumer of dyestuffs and about 70% of the total production of dyes is consumed by this sector. Global Scenario The world market for dyes, pigments, and dye intermediates is estimated to be around US $23 billion. Of this dyes and pigment market comprise 1.3 million tones valuing to be US$ 16 billion, and dye intermediated comprise US$ 7 billion. Though the overall growth of dyestuffs industry during the last 5 years has slowed down, the industry is still expected to maintain a growth of about 2% per annum in the next decade. China, Korea, India, Japan and Taiwan are the major players in this industry. However in terms of market share, European countries have remained the largest producers because they have concentrated on specialty products. 'DyStar', the joint venture between Hoechst AG and Bayer AG, is the largest producer of dyestuffs with 15 per cent market share in the world market. This is followed by 'BASF', which has a market share of 12 per cent. World textile chemicals industry is valued to be around US $15 billion, and is growing 3-4% annually. According to a study on dyes & organic pigments, the worldwide demand for organic colourants (dyes and organic pigments) is projected to increase to $10.6 billion in 2008 with an average annual increase of 4.9% from 2003. Generally, the dyestuff industry comprises three sub-segments, namely dyes, pigment

and intermediates. These are important sources in major industries like textiles, plastics, paints, paper and printing inks, leather, packaging sector etc. The impact of Global Meltdown on Indian Dyestuff Industry In India, Dyestuff Industry supplies its majority of production to the textile industries. Enormous amount of dyestuff products from India are exported to textile industries in Europe, South East Asia and Taiwan. India presently manufactures all kinds of synthetic dyestuffs and intermediates and has its strong hold in the natural dyestuff market. India is a one of the major global producers of dyestuffs and dye intermediates, principally for reactive, acid, vat and direct dyes. India has approximately 6 percent share in the world production of dyestuff products. Indian dyes and textile chemicals industry is no more insulated from the global meltdown. Industry sources say that the exports of Indian dyestuff is expected to go down in the second half as compared to the first half of this year due to global melt down and tough competition from China. Indian dyestuff industry faced less competition during the time of Olympics because some of the Chinese companies were shutdown temporarily due to the environmental laws introduced by China's Government. However the Chinese companies are back in business now, which is believed to probably affect the Indian exports. The dyestuff industry in India is mostly located in Gujarat and Maharashtra. Gujarat comprises of more than 1200 small scale industrial and factory sector units. In order to give a comprehensive understanding as to what extent this meltdown will affect the textile chemical industry; Fibre2Fashion spoke to Mr. Janak Mehta, President of Dyestuff Manufacturers Association of India, a national body representing the Dyestuff Industry in India Commenting on the economic crisis and recessionary trends, Mr Mehta said, "The economic turmoil gripping the developed nations all over the world has also undoubtedly affected our industry very adversely. A lion's share of dyestuffs from our country is exported to US, EU and South Asian Countries. Slow down of economy and recessionary trends for the last few months mainly in US and Europe has cast a shadow on our exports to these regions both directly and indirectly. Consuming sectors including garments and textiles, leather, etc., have been hit most seriously. As more than 60 percent of dyestuffs products are consumed by these industries and coupled with the downtrend in the consuming industry, the impact has been very severely felt by the dyestuffs industry and direct exports in particular as well, as a consequence. As per available data, export growth has slipped to almost 10 percent in September 2008 vis--vis a robust average of 27 percent witnessed during the earlier months of the current fiscal." Mr Mehta, commended the steps taken by the Government saying "No doubt infusion of liquidity by the recent Govt. measures like reduction in CRR and SLR, REPO rates etc. has brought in an additional Rs.100, 000 crores into the system and appreciation of the US dollar to almost Rs.49 in recent days has provided a much sought relief to our export fraternity although imports have become astronomically prohibitive." But in a solemn voice he lamented that "Saddled with the high cost of inputs and accumulation of inventory on the one hand, exporters are facing the irony of cancellation of export orders in the changed scenario on the other hand. Drying up of orders mainly from countries like US, EU and Japan, we are

afraid, is likely to hit our exporters harder in the next few months, if the present slow down in the global economy continues unabated." Industry sources say that the year 2009 could be worse for the Dyes and Chemicals industry as compared with 2008. However, it is expected hopefully that the situation will be back in the normal stage and Indian Dyestuff industry will be recuperate its position in the world market. References:

1. http://www.cygnusindia.com/ 2. http://economictimes.indiatimes.com/ 3. www.ficci.com/chem/dyestuff.htm 4. www.silobreaker.com

Impact of Global Meltdown on Indian Economy in 2009 Jan 9th, 2009 | By NVO Bureau | Category: Economy, Featured With the advent of 2009, economists are debating the extent of the impact of global meltdown on the Indian economy in 2009. The predictions range between somewhat optimistic to fairly pessimistic. But the common thread running is that 2009 will be challenging, indeed. The Deputy Chairman of the Planning Commission Mr. Montek Singh Ahluwalia says the stimulus package part two is part of the government strategy to deal with the situation as it evolves. The fiscal and monetary measures taken under the second package are targeted to increase liquidity for pushing up demand, addressing the concerns of the industries and provide incentives to exporters that have been hit by the recessionary conditions. The first objective is aimed to be met by reducing the key interest rates further the CRR has been cut by

point 5 percent, bringing it down to 5%. The repo and the reverse repo rates have been reduced by1% each, bringing them down to 5.5 % and 4% respectively. All this will leave more funds with the banks to enable them to lend more at lower rates of interest. The second objective will be met by curbing cheap imports. That explains why certain duties on import of cement, Zinc and ferro-alloys, TMT bars etc. which were removed earlier to fight inflation, have been restored. The third objective to boost exports is hoped to be met by a twin stroke-increasing duty drawbacks, which the exporters claim against the taxes paid on inputs needed to manufacture the item for export and extend the duration of the scheme up to the end of December this year. The government is able to do this because the inflation rate is consistently falling for the last one and a half month. As Mr. Ashok Chawla Economic Affair’s Secretary in the Finance Ministry observes “the trend is clear. This will translate into lower interest rates.” There is a possibility of inflation rate coming down to a tolerable 5% by the end of the current financial year. Mr. Ahluwalia is confident that despite the gloomy international economic situation India will register growth rate of 7 %. But, he says, fiscal deficit will be higher than anticipated on account of the stimulus packages announced. The mid-year economic review presented in Parliament, projects its increase to 5 percent against the target of 2.5 percent. The Reserve Bank of India Governor Mr. D Subbarao too admits that 2009 will be “more challenging” adding that the RBI will continue to do everything possible to mitigate the impact of global crisis on the Indian Economy. He however, says that the outlook for India and the world remains uncertain and the path of global crisis and its resolution remains unclear. That view is shared by the Nobel laureate Amartya Sen as well. Sen recently admitted that he did not have a ready answer to how deeply global meltdown will affect India in the New Year. The World Bank President Robert Zoellick predicts that the global economy is likely to “worsen” in the first half of 2009. The IMF chief concurs with him. The RBI has made it more than clear that it has a road map to deal with the situation and steps will be taken as and when required. To quote Mr. Subbarao “our approach has been to cross the river by feeling the stones.” It has already lowered its key interest rates-the CRR to a 2 year low and the repo and reverse repo rates to an 8 year low. But there are areas of concern as well. Foreign investment flows have declined. The Commerce Minister Kamal Nath informed the Lok Sabha that “FDI inflows between April and September 2008 showed an increasing trend each month in comparison to the same period in the previous year.” But he cautioned that FDI flows to the developing nations would generally decline in 2009. He was however quick to add that the government has put in place a liberal policy which permits FDI up to 100 percent on the automatic route, in most sectors and activities. The other area of concern is that India’s industrial growth has declined for the first time in 15 years. Since Industry accounts for about 25 percent of the country’s GDP it is bound to affect the growth rate. Exports declined by 9.9% in November last which is also worrisome. The RBI in its report says there are downsize risks from India’s increasing global integration such as the sustained outflow of capital, financial contagion and slowing world growth. It corroborates Prime Ministers view that in a globalised world, we cannot pretend that we will not be affected by the crisis that has been created somewhere else. But it says that use of a combination of instruments to absorb excessive pressure had helped cushion the impact on Indian economy. The silver lining is that since 50% of our GDP comes from the service sector, which is not affected much by the global recession, growth rate in the current year will end up around 7%. That is what the mid- year review estimates. Five years of nearly 4% farm growth and high domestic saving rate of 36% is seen as making that possible. That the government is alive to the situation is apparent through the measures it has been taking in association with the RBI from time to time. It has raised public expenditure by Rs.20,000 crore through the first stimulus package announced on December 7. The RBI too injected Rs.300,000 crore liquidity into the system through a series of cuts in rates . The second package will increase availability of funds with banks and non-banking financial companies by 75,000 crore. The state governments too have been allowed additional market borrowings of Rs. 30,000 crore. It is now for the Banks and the big industries to fulfill their share of responsibilities and ensure that the measures taken are effective. They need to move hand in hand with the government. Time and again, the Prime Minister has been assuring the people that despite the international environment the country has the capacity, ability and resilience to cope with the present global crisis. He has been citing the economic crisis of 1991 which Asia faced and which was “more” serious, but India overcame it efficiently. With steadfast commitments of all the players in the field we look forward to see India coming out of the present global crisis with minimum bruises.