All India Bank Strike

Case Study: Brand Builds, Service Breaks

Dr Tara Chaitanya was stunned to see  the installation engineer walk out of her clinic casually. After much drama — and four week’s delay — the AA-SW13, a top-of-the-line ultrasound machine, had been installed. But uniquely, when she tried to fiddle with its keys, the machine had failed to respond! Tara, who had to deal with so many problems during the purchase of the AA-SW13 from Company A, had been alarmed. This had been a huge purchase, made with her life’s savings and her husband’s...Why were the keys not responding? What else was going to fail? But Rasesh, the installation engineer, had pressed a few keys and remarked: “Just press two or three times, it will be all right, slowly-slowly...” And when a stunned Tara had protested that it was not normal, Rasesh had shut shop saying, “My job was to unbox the machine and set it up. I have done it. You please call the company and log in a complaint...” All Tara could do was refuse to sign his installation report.Tara called Company A’s Awasthi, the regional sales head who had sold her the machine, and told him stiffly how shocked she was. Awasthi tried to placate her, saying: “These things happen. Keep using, over a few days the machine will settle down....”That same refrain! “What do you mean settle down,” she asked. I have unboxed similar machines in the past, they never behaved like this! I am not using a whimsical machine! The AA-SW13 is a healthcare device, not a plaything. I don’t buy this ‘settling in’ logic! There is clearly a malfunction, please come and fix this!” She waited for a day, and a week, then a month. Her attention now shifted from her patients to the machine and its whims.  Press the keys gingerly... look at the screen, did keys respond? No?... This was not how the machine was meant to work!Company A did not jump to attention and Tara kept calling Awasthi asking him to change the keyboard. Yet Company A kept stonewalling, call after call. Till one day another service engineer Paul Anand landed up for a probe calibration. Young, bright and just out of college, he immediately acknowledged the problem. Testing the keyboard, he agreed that several keys were unresponsive. Thereupon Paul called the call centre and ordered a replacement. And within seconds, Tara even got a confirmation SMS! And sure enough in two days, the new keyboard arrived. The simplicity with which the problem was fixed astounded her. Paul had called the call centre, not his boss, and ordered replacement with confidence. It took him 20 minutes to open the machine cover, unplug the old keyboard from its connector, replace it with the new one, and screw back the cover. Dr Tara:  Why was your colleague unwilling to admit there was a problem? Paul: Just different people, I guess. (Then dropping his voice) Please don’t quote me, but sometimes engineers do not withdraw spares since they are appraised and evaluated on how low their spares consumption is! That’s also the reason my boss would not have supported me if I had called him for the new keyboard. But I made the call directly to the call centre. That call from a field service engineer cannot be buried...”Tara was further stunned. Company A’s service-ability was clearly person-specific! She had been compromised in order to aid someone’s appraisal! Company A prided in being a world-class organisation, but its service team could tweak the system to ignore her pending service calls, and even her refusal to sign off on installation closure, which were  less important than the value of spares withdrawn? The scales fell from her eyes. Anyway, the AA-SW13 was now working fine and her practice was back to its pleasant hum. A year later, Awasthi asked to meet Tara to present to her why she should consider upgrading to the new model, AB-SW15. He chased her, left numerous messages... This was the same man who had absented himself when she was in difficulty. But Awasthi was a salesperson and knew where to mine his commissions. He followed up repeatedly to tell her about the special offer: Company A  will take back the AA-SW13 at nearly 40 per cent of the cost of the SW15. He hard sold that the SW15 featured not only a new software version and a faster processor but also boasted of a new feature, cavito-sonometry. Tara had been hearing of cavito-sonometry — Company A had been drumming up its benefits for over six months at every conference. The new feature will be a good addition, she thought, a scanning modality for the future.... She was familiar with the series too and some leading specialists had recently upgraded to this model.  Tara accepted the offer. And so the premium SW15 was ordered. Of course, it arrived late yet again! And with a fresh bag of problems! Unbelievable! This time the keyboard worked fine — but the touchscreen did not. The touchscreen, which was designed for the doctor to mark points and select areas on the image for various measurements, was now mere cosmetic. But this time, there no Paul who had left for higher studies. Another young service engineer, Aman Yadav, had taken Paul’s place. Tara again logged in her complaint, stating the touchscreen malfunction. Aman did not acknowledge the touchscreen as a problem. Even as he entered, he looked at the machine from afar and told Tara it was likely that her hands ‘got greasy through the day’ and touchscreens do not work if hands are unclean. His tone was offensive.He hadn’t even tested the screen himself! And what was that about greasy hands? She had been working on touchscreen machines for years at her previous jobs, including the SW13! This man hadn’t even inspected the screen, let alone try it. And the next thing she knew, he was leaving. Tara was beginning to find all this surreal. Just then, her husband Shiv called to ask, “Did he fix it? What did he say.” He was worried. After all, they had just coughed up another Rs 25 lakh to upgrade! “Shiv, something is weird. The touchscreen is clearly not working and I have used these machines before, but this new service engineer they sent has come up with an absurd verdict!” And she narrated it to him.Shiv: Arre, but you use touchscreens all the time, your Nokia touch phone, your iPad... Dr Tara: I have been thinking. That man’s response was based not on reason but on conditioning. He spoke to me like he would to a woman in his environment, an unequal. Shiv: Then he shouldn’t be allowed to get away, whether he’s showing his incompetence, or poor attitude. Dr Tara: I am very angry. This is a top drawer machine manufactured by a Fortune 500 company. That automatically comes built with values, and must assure me right attitude and right approach. So, where does this guy come in? Oh, damn! Shiv: Perhaps you are right. He may be from a place where women are not seen in positions of decision-making and control. Hence, he lacked the script to speak with reverence. But... that does not exonerate him. So, he will learn on the job, Tara! I tell you this time and again, don’t be overwhelmed by the situation, instead overwhelm it. Climb above his disdain and tell him where he gets off! Never mind the machine.Sadly, Tara’s problems were only just resuming after a pause. For Tara, the machine was verily an extension of her brain. It ‘talked’ to her, performed the commands she ordered, while the patient merely lay down, placing total faith in the doctor, to find the problem areas…Tara was at a loss. In the absence of the touchscreen’s proper working, she was forced to use the keyboard, losing speed and precision. Presently a new quirk showed up (even as Tara promised herself never to touch Company A again and also warn all her colleagues). This one was a shocker. Read Analysis: Harish Natarajan And Dr Uma Nambiar  break-page-breakTara used two printers to print out the high-resolution colour images of the scans (which she gave her patients as part of her report), and it had worked fine with the earlier AA-SW13 machine. Now, the printers had been connected with the AB-SW15 on which the printer driver software files had been successfully installed. But now, the new machine would intermittently not print the scan images. Patients had to be told to come the next day.  They grew worried...But Aman blamed the printers, not the SW15. But the printers had worked fine with the SW13, then what was the problem? The printer was a DD790, manufactured by Dustin Dempa, a world class name in printers. DD’s service engineers checked and serviced the printers thoroughly and gave both printers a clean chit. If anything they felt that the new ultrasound machine was likely not rigged up properly to download its data to the printers, however Aman again stonewalled, “Ours is a world class machine, it is sought after by doctors and works successfully everywhere. Only at your place there is a problem. I suggest you buy a new printer,” he ended confidently.The printing roadblock was a huge hurdle for Tara. Patients could not take a scan image with their report; most patients had onward appointments with their gynecologists or their physicians. Tara was struggling to be fair and helpful to her patients. So she made a quick decision: she asked Dempa to send a new colour printer at a cost of Rs 25,000. But oh! No. The AB-SW15 continued to malfunction ­—the print command would invoke the printer, then midway printing, the print would begin to get distorted. Expensive photographic paper and even more expensive ink cartridges were wastefully consumed. Time was wasted as images had to be printed twice, three times, to complete a satisfactory report. Tara was confused.But by now, she sensed that the trouble lay with the SW15. Dempa’s service engineer, who waited while she tested the new printer on the SW15, was surprised that she was buying a new machine at all, when both her current printers were perfect, and, in fact, one was still within warranty period. Now, when the third printer too did not respond, Aman was again called. This time he asked her to move to a different brand of printers justifying that with some exotic explanation. So, here was Dr Tara Chaitanya, having just upgraded to an even more expensive AB-SW15 after trashing two printers, bought a new one also costing a small fortune and had gotten nowhere. She looked at Aman and saw there a novice, who knew nothing. He had no trouble-shooting skills, nay... he had no installation skills to begin with. He was using her as a guinea pig to try anything that came to mind. She could not help recalling Paul — same age, same skill set, but what a difference in their approach and effectiveness at problem resolution!Meanwhile, another situation had quietly arisen. Just eight days after the new machine had thrown her life out of gear, Tara noticed that the SW15 had started to hang or restart while the patient was being scanned. This is what happened. Mariam, a 25 year old suspected to have an ovarian cyst, was being scanned. Tara was explaining to her about the cyst that was likely not growing, but there were some darker areas on screen that needed to be investigated ... and then, the machine just froze, the probe stopped responding, the screen image disappeared…and all too suddenly, the machine restarted on its own after 20 seconds.This happened again with another patient. And again. Twice in the first week. Four times in the next week. Tara felt like she had been handpicked for disaster. Like the printing problem, this too was intermittent and clearly pointed to some problem with the machine’s hardware or software. Tara knew machines. She worked with them all the time. Something was not right. She called Awasthi, who promised to get more technical help to probe and address the issue.But  her clinic was in trouble. All in all, work had become such an unusual challenge — caused not by lack of clientele, or funds, or lack of wisdom... but because of the most critical aspect of her practice — the ultrasound machine — which helped the patient’s body communicate with her. Tara was waking up to her worst fear: probable loss of patient confidence in her. It was no use telling the patient, “Sorry, this is the latest, best machine...” Especially if the machine was suddenly shutting down and the patient was reading the error message. How would they trust her? Tara was in her clinic one Saturday, the busiest day of the week, when the printers again malfunctioned. Patients had been waiting for two hours and more were landing up at their appointed times. Given how poorly the machine worked, the time per scan had risen significantly and she had begun to work weekends as well. She called Company A’s service line and Aman’s mobile several times. Her patients left, unhappy, but also confused. She moved some of them to Sunday morning in the hope that by then a solution would be found. Read Analysis: Harish Natarajan And Dr Uma NambiarShiv knew when enough was enough. He did not call Awasthi but left a most menacing message for him: You get an hour from now. If I do not see you at the clinic the AB-SW15 will be up on Pinterest with this caption: Don’t trust this machine. Tara only marvelled at why men worked best when treated like a beast. For, Aman and Awasthi arrived within the hour making poor excuses. Together they reinstalled all printer drivers, taking till midnight to do so. As Shiv kept vigil, Tara printed a few pending reports but with problems. Patients had to be texted in the middle of the night to please come on Monday, their Sunday appointments now rescheduled. Tara was totally unhappy with the way things were going on. This was never how she worked.  But what ailed the SW15?  To be continued...casestudymeera@gmail.com (This story was published in BW | Businessworld Issue Dated 02-06-2014)

Services Growth Picks Up Pace In September

Growth in services activity picked up pace in September as order books filled up at a faster rate, a business survey showed on Tuesday (7 October).The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, rose to 51.6 in September from 50.6 in August, reversing a slowdown seen in the previous two months.A reading above 50 signifies growth while anything below denotes contraction.The new business sub-index climbed to 52.4 from 51.9, signalling robust demand."Service sector activity bottomed out in September thanks to stronger new business flows," said Frederic Neumann, co-head of Asian economic research at survey sponsor HSBC.In what might also give some respite to an economy that has long struggled with high inflation, the sub-index measuring output price growth fell to a near four-year low.India's annual consumer price inflation eased in August to 7.80 per cent from 7.96 per cent in July. Wholesale prices also rose at a slower clip during that month.But the Reserve Bank of India doesn't appear to be in a hurry to ease monetary policy and hinted last week that it won't do so until it is confident that consumer inflation can be reduced to a target of 6 percent by January 2016.Activity in the private sector has expanded steadily since May, when Prime Minister Narendra Modi won a landslide mandate that created a wave of optimism over India's economic prospects.But the lack of sweeping reforms by Modi's government so far has taken the sheen off those hopes.The survey showed firms' confidence regarding future business grew at the slowest pace in a year last month."A pick up in reform effort is sorely needed to put growth on a firmer footing and address supply side risks to inflation," Neumann said.(Agencies)

CAG To Audit Pvt Cos, PPPs With Revenue Sharing Pact

Regretting that economic progress has thrown up a class of 'rent seekers', Comptroller and Auditor General Shashi Kant Sharma on Tuesday (13 May) said the CAG will continue to audit private companies and Private Public Partnership (PPP) projects in cases where revenue sharing with the government is involved. "Work on telecom audit is already in progress and I am hopeful that our first report would be ready before the year end. A report on gas and oil exploration will be presented to Parliament soon. We will be taking up performance audit of some ongoing PPP projects shortly," he said while speaking at a conference on corporate fraud. Noting that CAG audit will not cause any discouragement to investors, Sharma said, "in a mature market economy, where there is very little scope for manipulations and fudging, why should companies fear such audit if they have nothing to hide."  Capitalism based on rent seeking, he said "is not just unfair, but also bad for long term growth. In such an environment, resources are mis-allocated, competition is repressed and dynamic new firms are stifled by better connected players". Rent seeking refers to instances when a company or individual use public resources to obtain economic gain from others without reciprocating any benefits back to society. "Many of the corporate tycoons, throughout the emerging economies, are today accused of making fortunes by "rent seeking". They want to grab a bigger slice of the pie rather than making the pie bigger," he said, adding the industries vulnerable to such abuses include banking, mines, telecom spectrum, utilities, oil and gas and public infrastructure. Although several private companies, specially in telecom, oil and power have resisted audit by CAG, the Supreme Court in its latest judgement had ruled that any entity using public resources in its business and sharing revenue with the government can be audited by the CAG. "Our stand has been the same since long," Sharma said. India, Sharma said, is a young and restless nation where youth and deprived sections are angry about corruption, which they feel is on account of "collusions between sections of government and select private players". "We must ensure that corruption and fraud doesn't spill out into becoming an issue that would unsettle the growth of the nation... The economic progress that has created a class of 'rent seekers' has also created its nemesis, a new, educated, urban, tax paying middle class that is aware of its rights and role, and pushing for a change for the good of the nation," he said. Sharma emphasised that there should "be no doubt that the principle (laid down by the Supreme Court) which is applicable to spectrum, applies to all natural resources which belong to public and where revenue is to be shared with Government; and CAG is duty bound to report to Parliament in all such matters". The CAG had earlier initiated an audit of private telecom companies after TRAI allegedly found they were under-reporting income to avoid sharing it with the Government. The telecom companies later approached the High Court against CAG audit, but their plea was rejected. Supreme Court too upheld the ruling of the HC. Similarly private power distribution companies resisted CAG audit, but their plea was rejected by the Delhi High Court. CAG is currently engaged in audit of these discoms. Elaborating on the need for auditing companies engaged in revenue sharing with the government, Sharma said "there is evidence to suggest that countries that do well to counter crony capitalism generally have better institutions. "Governments must aim to improve regulation and boost competition. Further, rules are to be enforced rigorously so that they are ignored less freely." (PTI)

Analysis: Care Without Compromise

Poor Dr Tara Chaitanya! Murphy’s law appears to be working overtime in her case. There are several dimensions to the problem: 1) The overzealousness of the salesperson 2) The lack of post-sale customer engagement 3) The gender debate — was Tara being mistreated because she was a woman?Below these are the more serious ones that are being faced by the entire healthcare industry of which Tara is a part: 1) The inability of many hospitals to provide meaningful careers to bright doctors 2) The rush to buy the biggest, newest, most expensive machines — and the consequent pressure on utilisation, revenues and pay back 3) The paradox of wanting to do things the right way — but lacking the deep pockets and staying power 4) The entrepreneurship vs employment dilemmaThe Awasthi model salesperson prides himself at being able to sell snow to Eskimos. He will promise and do anything to make the sale — ignoring customer needs. At the core of the issue is how companies traditionally manage performance. Salespersons are seen as hunters — and are lauded for deals struck, customers acquired and the size of the kill! Companies are now beginning to recognise this folly and rewarding repeat business and customer engagement disproportionately. While not adequate, it’s a start.Similarly, service engineers should be rewarded for customer delight, equipment uptime, mean time to repair (MTTR) and mean time between failures (MTBF). To ensure that service engineers like Rasesh and Aman will not sacrifice customer satisfaction for better appraisals. In this instance, the company appears to have taken the easy path — of tracking revenues and costs. It is all about fixing the “what” of performance measurement before getting lost in the “how”.Then, there is accounting nomenclature — land and buildings are tagged as “assets” but spends on brand equity building and customer service are labelled “costs”! This has to change if companies want to send the right message.Companies like Nordstrom, a US-based fashion retailer, on the other hand, have done this very effectively. Nordstrom customers can return items without even producing receipts. This has, over the years, resulted in happy customers buying more! Ritz-Carlton allows employees a discretionary spend of $2,000 to redress guest complaints — and delight them. “Good service is all about surprise and delight,” says Diana Oreck, vice president for the company’s executive training facility. These simple actions reflect the attitude of the company, empower employees, model right behaviour and ensure that core values percolate to the last person. One admires Tara’s courage for plunging into entrepreneurship to serve her patients better. Yet, will she be able to face up to the challenge of her investments not paying off for several years? Many doctors start as crusaders but are soon faced with the inevitable challenge — compromise on your ideals, or go under! Is there a middle path — one that will help Tara build a sustainable business without compromising patient interest? I firmly believe that there is — by building long-term care partnerships with patients, families and communities.Tara needs to resist the urge to be everything for everyone — and do just what the patient needs. She should stick to what she does best, and build strong referral networks to direct patients to when their condition warrants different equipment or expertise.Best machines don’t always produce the best results. In fact, most experienced surgeons swear by techniques and tools they have developed comfort with. Most successful practices are those that operate within their means. They will upgrade their equipment when their practice demands it. Tara may like to think about this.The road to being an entrepreneur can be incredibly tough and arduous — it is only when one takes the plunge does one realise the full extent of the challenge. Yet, to quote Thomas Edison: “Many of life’s failures are people who did not realise how close they were to success when they gave up.” Tara has to draw inspiration from within — and have faith in her own ability.   (This story was published in BW | Businessworld Issue Dated 02-06-2014)

$250-bn Investment Needed For Urban Infra: Naidu

India needs to invest an estimated $250 billion over next 20 years for basic urban infrastructure offering a huge investment opportunity, Union Minister for Urban Development M Venkaiah Naidu said on Tuesday (7 October)."As per the estimates of a high-powered committee, we need to invest $250 billions over the next 20 years to put in place basic urban infrastructure relating to transport, water supply, sanitation and solid waste management alone.This offers a huge investment opportunity and we are committed to promote private domestic and foreign investment in a big way," Naidu said.There are ample opportunities for the international investors to come and invest in India and particularly in urban India, because the government has decided to allow FDI in infrastructure also, the minister said at the XI Metropolis World Congress that got underway here.At the current level of urbanisation itself, urban areas in India are contributing to around 60 per cent of the GDP which is estimated to rise to 75 per cent in another 10 to 15 years, he said."It is for this reason that urbanisation is seen as a driver of economic growth. It means urban areas are engines of growth and this is the reality," he said.Stressing the need for bringing in reforms in urban governance, transparency and accountability in the system, he said people must be able to have hassle-free administration, online registration, online sanction of plans and approvals."We must have digitisation of land records and property details of the cities. Hyderabad has shown the way in this regard. Because of digitisation of records, the revenue of Hyderabad has increased manifold and I am confident that other cities of the country will follow the same," he said.The Centre will fund the scheme of digitisation of the property details of every city that will go a long way in increasing revenue of urban bodies of the country, Naidu said.Urbanisation is a reality and it's a challenge, but Government of India wants to convert this challenge into a great opportunity and improve living standards of the people, he said."The states and the Centre, together we want to work as team India and see to it that people are provided with basic amenities both in urban as well as rural areas," he added. Globally, more people live in urban areas than in rural areas. 54 per cent of the world's population is residing in urban areas, as per the census of 2014. It is expected that 66 per cent of the global population could be urban by 2050, Naidu said.In India, as per the 2011 census, 31 per cent population (377 million people) is living in urban areas. The projected figure by 2050 is that more than 50 per cent of the Indian population would be urbanised."That is the reality that we have to prepare and gear up to this challenge and convert it into an opportunity," he said.As the world continues to urbanise, sustainable developmental challenges will be increasingly confronted in cities particularly in the lower and middle income countries where the pace of urbanisation is fastest, the minister said.The primary challenge that accompanies the growing urbanisation is to ensure 'inclusivity'."We need to ensure that every urban resident feels involved in the socio-economic and cultural landscape of the city that he had come to live in and thereby make him 'own that city' rather than being subjected to the feeling that he is 'not wanted and has no hope'.Efficient planning and effective urban management are very critical to enable urbanisation that is sustainable in social, economical and ecological terms, he said."It is in this context we have envisioned the development of 100 'smart cities' as satellite towns of larger cities and by modernising the existing mid-sized cities," Naidu said.A smart city is the effective integration of physical, digital and human systems in the built environment to deliver sustainable, prosperous and inclusive future of all its citizens.It delivers public and civic services to citizens and businesses in an integrated, resource efficient manner while enabling innovative collaborations to improve quality of life and grow the local and national economy, he added.Andhra Pradesh and Telangana Governor ESL Narasimhan and Telangana Chief Minister K Chandrasekhar Rao were among those who spoke at the inaugural ceremony. (PTI) 

The State Of The Economy

Analysis: Be Aware, Be Very Aware

This case clearly is a manifestation of  some serious maladies in the manner some of the equipment makers function. Whereas a large part of the problems encountered by Dr Tara Chaitanya in the case study has been due to certain deficiencies in Company A’s outlook and focus on its after-sales service coupled with poor customer relationship management, there is also a problem of the doctors’ lack of understanding of different aspects of purchasing any equipment. Company A, a Fortune 500 company, clearly has a very good product in its stable in terms of technical superiority but is plagued by highly inefficient, uninterested, untrained and unmotivated after-sales workforce as evident throughout; which is at cross-purposes with an aggressive sales force. Such a contradiction in its customer relationship management will most likely backfire in not-too-distant future to spell doom for the company. It appears that Company A just wants to makes sales at any cost, a very short-term approach. Despite the fact that it enjoys a good market position today, it clearly lacks a strategy for efficient after sales or for technical and behavioural training of its employees. The technical workforce of the company (barring a few) is not only limited in its knowledge of the products but seems to also suffer from a ‘laisse faire’ attitude. These pose a serious threat to the company’s market positioning since trained a workforce is as much an asset of the company as its products are and they compliment the technically superior product. Servicing of clients by professional employees is the key to retaining loyal customers. The word-of-mouth publicity, which a satisfied client can give, is one thing, but the word of mouth of an angry Tara can destroy the reputation of the company in the very exclusive and elite client base of specialist doctors. Each equipment in healthcare is critical and any equipment posing the risk of inaccuracies related to diagnosis is unlikely to remain popular with doctors. It is imperative on the part of Company A to ensure that whether by way of technical nature or by effective servicing of complaints, this continuum of patient safety is maintained. Accuracy, rapid response, and patient safety features are also the cornerstones of the confidence of the doctor which translate into patient satisfaction and successful practice of a clinician. Given that Tara was already an aggrieved customer of SW13, one would have thought that Company A would have ensured its systems had the mechanism to identify Tara as a special client to be ‘handled with greatest care’ and spent extra effort on increasing her faith in the brand. None of this was evident in this case. In fact, the same team in the field continued to dispense very shabby treatment to a client who was already a dissatisfied customer. This, for any company, is a serious error, bordering on indifference. Company A really needs to do some soul searching and institute mechanisms to upgrade skills of the technical staff in addition to its gender sensitisation and behavioural/ attitudinal training. It must also look at changing the appraisal mechanisms so as to incorporate customer satisfaction as an important key result area than cost savings on spares! On the other side, doctors also need to educate themselves about purchase agreements and conditions of after-sales service and payments. It is important that the initial agreement must clearly define and include criteria for satisfactory installation, user training on the equipment and payment should be pegged to performance — both installation and satisfactory working of the machine. This clause ensures that the finance department of her outfit follows up the payment and identifies failures and pins it to the performance clause. Clinics and hospitals will certainly benefit by insisting on a penalty clause. Additionally, at the time of making a second purchase (or upgradation) was the best time to correct this mistake. Tara had an opportunity to insist on a performance clause and include downtime of equipment, loss of patient confidence and subsequent potential loss of clientele.    The writer is special advisor to the Minister of Health, Djibouti. She has worked in India in diverse capacities across the industry as neurosurgeon and senior healthcare administrator(This story was published in BW | Businessworld Issue Dated 02-06-2014)

China April Data Underscores Economy Still Losing Steam

Chinese investment, retail sales and factory output growth all disappointed in April by hitting multiyear lows, suggesting the world's second-largest economy is still losing steam despite government efforts to shore up activity. Factory output rose 8.7 percent in April from a year earlier, marking the slowest growth in five years, the National Bureau of Statistics said on Tuesday. The result missed economists' expectations of an 8.9 per cent rise. The lacklustre performance led some analysts to question whether the government may step up efforts to bolster economic growth lest it fall short of the official target of around 7.5 percent. "Whether the government will take enough measures to lessen the downturn, this is the biggest question for now," said Wei Yao, an economist at Societe Generale in Hong Kong. "The most concerning number is the fixed-asset investment number," she said. "The number basically tells us the housing downturn has more than offset the investment push from the government so far." Fixed-asset investment, a key driver of growth, grew 17.3 per cent in the first four months of the year compared with the same period last year. That was weaker than expected and the worst showing since December 2001. Retail sales also missed forecasts by rising 11.9 per cent in April from a year earlier, the weakest growth in more than five years. To shore up economic growth, Beijing has been loosening policy at the margins by lowering taxes, quickening infrastructure investment, and reducing the amount of cash that the smallest banks have to keep at the central bank to encourage freer lending. But a slowing property market, where revenues for developers are falling even as home prices continue to rise, has heightened the pain of the cooling economy. Data on Tuesday showed revenues from property sales fell 7.8 percent in the first four of months of the year compared with the same period last year. Real estate directly affects about 40 other industries in China and is considered a crucial pillar of the economy. In a sign that China's housing downturn is starting to disconcert authorities, sources told Reuters on Tuesday that the central bank has asked commercial banks to quicken their disbursements of mortgages. Economists polled by Reuters had forecast retail sales to rise 12.2 per cent. Fixed-asset investment for the January-April period was seen up 17.7 per cent.  (Reuters)

SC Panel Comes Out With Guidelines On Govt Ads

A Supreme Court-appointed high- powered committee has recommended that names and pictures of political parties and their office bearers like presidents be not mentioned in government advertisements.Holding that there had been "misuse and abuse" of public money on such advertisements, the three-member committee headed by eminent academician Professor N R Madhava Menon has framed guidelines to regulate expenditure and contents of such advertisements paid out of tax payers' money.The report, submitted to the apex court, has emphasised that only pictures and names of the President, the Prime Minister, Governor and Chief Ministers be published to "keep politics away from such ads".Sources said the Committee has also endorsed the suggestions of the Election Commission that there must be "severe" restrictions on such advertisements six months prior to elections.It recommended that a deadline should be fixed for prohibiting their publication and the poll panel should be authorised for the purpose.The committee, also comprising T K Viswanathan, former Secretary General of Lok Sabha and Solicitor General Ranjit Kumar, recommended that there should only be a single advertisement, preferably by Information and Broadcasting Ministry, in respect of commemorative advertisements, which are given on birth and death anniversary of an important personality.  The Committee said that an amount or budget for the public advertisements should be declared by each ministry and public sector undertaking and it should be audited by CAG.The Committee, which also suggested that there should be an implementation committee headed by either Ombudsman, or Cabinet Secretary or Secretary I&B Ministry, said government advertisements should not be allowed to the advantage of the ruling party and for assailing the opposition.Further, sources said that the committee in its guidelines suggested that there should be a clear-cut differentiation between legitimate message of government from that of political message which can be done by enacting legislation.The committee prepared its guidelines by consulting provision of various countries and having meeting with all state governments and political parties.The apex court had on April 24 decided to frame guidelines to prevent misuse of public funds by the government and its authorities in giving advertisements in newspapers and television for political mileage and set up the committee.It had said there is a need to distinguish between the advertisements that are part of government messaging and daily business and advertisements that are politically motivated."In these circumstances, conceding that the existing DAVP policy/guidelines do not govern the issues raised in these writ petitions and do not lay down any criteria for the advertisements to qualify for public purpose as opposed to partisan ends and political mileage, there is a need for substantive guidelines to be issued by this court until the legislature enacts a law in this regard," it said.(Agencies)