The subject of this post can be captured using the word ‘Critical’. Are the highways projects being undertaken by the National Highway Authority of India critical for the development of the country ? And does the current pace of development so bad that it can be termed critical. The answer is yes to both questions, and outlines the problems that this country faces in terms of infrastructure.
The development of good, fast highways is an extremely important part of the infrastructure of the country; it helps in keeping the movement of goods across large distances, enables greater mobility of people, reduces the dangers of perishable items expiring, reduces cost fluctuations caused by distance factors, improves the life of vehicles and tyres, reduces fuel consumption, and a few others. In India, one of the best things that the BJP Government is remembered is for the massive road projects that it launched, and with the Highways Minister Col. Khanduri running it, the projects were on track. Given the importance of this area, one would have thought that the Congress Government would ensure that the projects are on track. However, for some time now, it has been clear that these projects are not on track, and here is a severe admonishment of the Government from the Delhi High Court:
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If you have been reading the financial papers for the past 2 days, you would have realized that suddenly something seemed to be happening at Satyam, and if you were more interested, you would have read that suddenly Satyam seemed to be in the eye of a storm regarding issues of corporate governance. It all started when Satyam announced that it was planning on spending $ 1.3 billion on diversification, and that too, this amount would have been spent on buying Maytas, a company in which the promoters of Satyam hold a 35% stake. This was not a deal that was approved by shareholders, and apparently not even by the board.
The shareholding of the promoters in Satyam is only 8%, with institutions holding a majority, and this action by the promoters saw an incredible reaction on the stock exchange. Immediately after this move, there was a reaction from shareholders, with the ADR on the US market falling by 52%. The next day, financial newspapers unanimously denounced this move as a gross violation of all norms of corporate governance, and in moves that would have scared the promoters, institutions threatened to review whether there is a trust in the management of the company.
Now, this proposed move has been withdrawn, but has left a mark on the management of the company that is difficult to get away; it will take time before the trust quotient can be restored:
Lee’s Dhaba for more…………
The articles below outline issues which will determine future prospects…
- Global economic conditions are not getting better
- No industry is immune
- The Government is under a microscope as it deals with the Economic and Security crises.
India’s growth has largely been a result of Government getting out of the way of Private enterprise…progressive dismantling of the license-raj has removed barriers for new businesses. How is a government that has been told to get out of the way for the sake of progress going to tackle problems where it is the “DOER”. The only area that Government has been allowed to be the “initiator” is Defence and Security. The record is woeful.
India can do little about 1) and 2) above; but to hear an influential voice like Jack Welch put the Government of India on notice is ominous. Can an administration which has been sleeping for four and a half years respond to this challenge? My skepticism of this administration is tempered by my belief in the strength of the people and their will to succeed.
“What will be the growth rate next year will largely depend on how the economy performs in the second half of the current fiscal.”
In the first half of this financial year (April-September), India’s economy expanded by 7.8%.The bank expects India to grow by 6.3% in 2008. The government has said India will grow by between 7% and 8% in 2008-09.
The bank’s Global Economic Prospects 2009 report estimated India’s growth next year at 5.8%, and said the world is on the brink of a rare recession
Yahoo to lay-off three percent in India
Small number, but the psychological impact is huge.
Mumbai terror strike may benefit China
“… all foreign companies can do right now is boost security for their people and wait. Meanwhile, many investors will be thinking about tilting the balance to China,” they wrote in a recent column for American publication BusinessWeek.
Noting that the possible slant towards China is understandable, the column said, “Despite persistent worker protests, the Olympics this summer left little doubt of the country’s ability to manage itself.”