India Newsletter 01 2016

INDIA NEWSLETTER Indian Embassy, Vienna

Published by the Embassy of India, Vienna Year 6 • Issue 61 • January 2016

MAKE IN INDIA IT & BPM India Newsletter • 1

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The Digital India programme is a flagship programme of the Government of India with a vision to transform India into a digitally empowered society and knowledge economy Digital Infrastructure as a Core Utility to Every Citizen

Governance and Services on Demand

Digital Empowerment of Citizens

www.digitalindia.gov.in 2 • India Newsletter

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The new Government has prepared a five pillar strategy to drive India’s growth, which offer multiple avenues of collaboration and investments

■■ Infrastructure Development

■■ Manufacturing Growth

■■ Skill Development

■■ Energy Sufficiency

■■ Improved Business Environment

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The Government of India is launching the “Start-up India,” movement on January 16th, 2016 in New Delhi.

The event is aimed at celebrating the entrepreneurship spirit of country’s youth and will be attended by CEOs and founders of top Start-ups (over 1500) from across the country. The closing session will be addressed by the Honorable Prime Minister of India, Shri Narendra Modi who shall formally launch the initiative and unveil the Start-up Action Plan.

Union Minister of Finance and Corporate Affairs Shri Arun Jaitley shall inaugurate the event in Vigyan Bhawan at 9.30 am on 16th January 2016. Minister of State for Commerce and Industry, Smt. Nirmala Sitharaman shall be the Guest of Honour for the event.

The event shall be a non-stop day long global workshop on Start-up Entrepreneurship and shall include panel discussions on topics such as “Unleashing Entrepreneurship and Innovation: What do Indian Startups Need to Grow and Prosper”, “Celebrating Women: Stories of Innovative Women Entrepreneurs”, “How digitization will change India’s future”, “Making Indian Healthcare Leapfrog” and “Financial inclusion is within reach”. The panel discussion on “Show Me the Money: How do we Capitalize Entrepreneurship?” shall be chaired by Minister of State for Finance Shri Jayant Sinha. A unique Question 4 • India Newsletter

and Answer (Q&A) session titled “Faceto-face with Policy makers” is also being organized wherein Secretaries of Key Government Ministries and Departments will answer questions on how Government will be creating an enabling ecosystem for Startups. The objective is to reinforce commitment of the Government towards creating an ecosystem that is conducive for growth of Start-ups.

The panel shall comprise of Secretaries from Department of Revenue, Department of Human Resources and Development, Department of Corporate Affairs, Department of Financial Services, Department of Economic Affairs, Department of Science and Technology, Department of Biotechnology, Department of Electronics and Information Technology, Department of Micro, Small and Medium Enterprises and Department of Skill Development.

Additionally, the panel will have representation from Securities Exchange Board of India (SEBI) and Small Industries Development Bank of India (SIDBI).

The event shall also feature interactive talks with global leaders and venture capitalists such as Mr. Masayoshi Son (Founder and CEO, SoftBank), Mr. Travis Kalanick (Founder, Uber) and Mr. Adam Nuemann (Founder, WeWork).

A delegation of over 40 top CEOs and founders of Start-ups, Venture Capitalists and Angels investors from Silicon Valley will be attending as

special guests for the event and will be taking part in interactive Q&A sessions.

Google shall be conducting an innovative session titled “Launchpad Accelerator” which will involve live pitches being made by early stage Start-ups to potential investors. Nikesh Arora, President & Chief Operating Officer, SoftBank shall be interacting with participants on aspects relating to Start-up funding. A virtual exhibition is also being organized as part of the event to showcase some of the unique and innovative work done by Start-ups in the country.

As Prime Minister Shri Narendra Modi had indicated as part of his last “Mann ki baat” radio programme, a full Action Plan of Start-up India shall be launched as part of the event. The plan shall highlight initiatives and schemes being undertaken by the Government to address various aspects relating to developing a conducive Start-up ecosystem in the country.

Considering the importance of this event towards promotion of Start-up culture in the country, the event will be telecast live in IITs, IIMs, NITs, IIITs and Central Universities and to youth groups in over 350 districts of India.

Department of Industrial Policy and Promotion (DIPP) is organizing this event along with Invest India and Startup ecosystem players iSpirt, YourStory, NASSCOM, SheThePeople.tv and Kairos Society and youth wings of FICCI and CII.

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NEWS FLASHES

01

India’s foreign exchange reserves increased by US$ 943 million to US$ 352 billion in the week ending December 26, 2015: Reserve Bank of India.

02

Foreign Tourist Arrivals (FTAs) in November 2015 increased 6.5 per cent year-on-year to reach 815,000: Ministry of Tourism.

03

Indian companies raised Rs 68,608 crore (US$ 10.54 billion) in 2015 from Initial Public Offerings (IPOs), Offer For Sale (OFS), and Qualified Institutional Placement (QIPs), which was 76 per cent higher than the amount raised in 2014: Prime Database.

04

Indian start-ups raised Rs 36,000 crore (US$ 5.5 billion) from venture capital (VC) and angel investors in 2015 through 1,096 deals, which roughly translates to an investment in a start-up every eight hours : VCCEdge.

05

Indian information technology (IT) industry paid US$ 22.5 billion in taxes in United States during FY2011-15.

06

India is expected to become the world’s third largest economy just behind China and US post 2030: Centre for Economics Business and Research (CEBR).

07

Sales of utility vehicles (UVs) have grown at 20 per cent yearon-year in November 2015 as compared to 5 per cent in the previous financial year and have outpaced the growth of passenger vehicles (PVs): Society of Indian Automobile Manufactures (SIAM).

08

Overseas mergers and acquisitions (M&As), led by deal activity in the pharmaceutical and healthcare sector, reached US$ 1.5 billion in 2015, which is the highest in last five years: VCCEdge.

09

India needs Rs 31 trillion (US$ 465 billion) to be spent on infrastructure development over the next five years, with 70 per cent of funds needed for power, roads and urban infrastructure segments : ASSOCHAM and Crisil Ratings.

10

Indian e-commerce sales are expected to reach US$ 55 billion by FY2018 from US$ 14 billion in FY2015: eMarketer.

11

I n d i a n pharmaceutical market has crossed the Rs 1,00,000 crore (US$ 14.9 billion) mark in November 2015 on the basis of Moving Annual Total (MAT): IMS Health.

12

India’s internet usage has increased by 49 per cent so far in 2015, and the number of rural mobile internet users is expected to reach 87 million by end of December 2015.

13

India’s industrial output increased at a rate of 9.8 per cent in October, 2015 which is the fastest rate of growth in the last five years: Ministry of Statistics and Programme Implementation.

14

Brand Tata has topped the list of most valued brands in India for the third consecutive year, and is valued at Rs 669.4 billion (US$ 10.02 billion) in 2015, a rise of 12 per cent in brand value over the last year: Interbrand India Survey.

15

Foreign Direct Investment (FDI) in India has increased by 24 per cent to US$ 60.69 billion in the last 16 months: Ms Nirmala Sitharaman.

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NEWS ARTICLES Foreign funds overweight on India bonds India has a positive story for bonds with some foreign funds investing in emerging markets overweight on Indian bonds, a report said.

Falling oil prices improved Indian government finances — the country is a net importer of oil — while a stable currency and limited exposure to China supported these investments.

Rupee bonds offered 8.1 percent returns last year, and yields on 10year bonds are expected to drop 33 basis points to 7.4 percent this year, according to a market survey.

10-year Sri Lanka bonds, in comparison, are quoted at 10.60/11 percent.

“Investors have a positive view on Indian economy,” Manish Wadhawan, managing director and head of fixed income at HSBC India, told the Economic Times.

“Second, among Asian peers, Indian debt is offering highest yields.”

According to Wadhawan, even in a situation where a strong dollar is combined with a weaker yuan, the expectation is the rupee can outdo its rivals.

The rupee was one of the better performers in emerging markets in 2015, with foreigners showing confidence on the back of slowing inflation, modest fiscal and current account deficit and government efforts to push through reforms.

India is expected to cut its repurchase rate by 25 basis points in 2016, after a 125 basis point cut last year, according to a survey of economists, a Bloomberg report said.

Last month, the Reserve Bank of India indicated it may further cut interest rates due to limited inflation risk and will announce its next monetary policy position on February 2.

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“India is our favorite destination for fixed income investments in Asia for the moment, with very attractive yields on a risk-adjusted basis,” said Anders Faergemann, sovereign portfolio manager for emergingmarkets fixed income in London at PineBridge Investments.

“It appears to be facing the global headwinds better in comparison to other emerging-market peers, is not too dependent on exports and also has quite limited trade linkages with China.”.

India to install 4.2 GW of rooftop solar under increased budget The Indian Government has unveiled plans to install 4.2 GW of grid connected solar PV up until 2019-20 under its National Solar Mission. A budget of around US$751 million has been allocated. It is still unclear how its 40 GW 2020 rooftop target will be met, however.

India’s Cabinet Committee on Economic Affairs, chaired by Prime Minister, Shri Narendra Modi, announced on December 30 that it has upped its budget for rooftop solar PV deployment, from INR 6 billion (around $90.2 million) to INR 50 billion (around $751.8 million) up until 2019-20.

The aim is to install 4.2 GW of grid connected rooftop solar PV systems over the next five years in the residential, government, social and institutional sectors. A capital subsidy of 30% will be provided for general category states, and union territories of which there are seven; while 70% will be given to special category states i.e., NorthEastern States, including Sikkim, Uttarakhand, Himachal Pradesh, Jammu & Kashmir and Lakshadweep, Andaman & Nicobar Islands.

Commercial and industrial rooftop installations will not receive the subsidy, as they are eligible for other benefits, including

accelerated depreciation, custom duty concessions, excise duty exemptions and tax holidays, said the government.

Of the 100 GW of solar PV targeted by 2020, 40 GW are expected to be installed in the rooftop sector.

The government statement did not outline how this figure is to be achieved.

Bridge to India, which released a solar rooftop map for 2016 last November, calculated that cumulative solar PV rooftop capacity, as of October 31, 2015, was just 525 MW, of which residential comprised 143 MW, commercial 172 MW and industrial 210 MW. It projects that 6.5 GW will be installed by 2020. Meanwhile, in a report also released in November, KPMG India forecast that 10 GW of will be installed by 2020, and up to 49 GW by 2025.

In its December 30 statement, the government said that to date, 26 Indian states have some form of net metering/gross metering facilities in place to support rooftop installations.

“Today it is possible to generate solar power from the solar rooftop systems at about Rs.6.50/kWh. This is cheaper than the diesel gensets based electricity generation.

It is also cheaper than the cost at which most DISCOMs would make power available to the industrial, commercial and high-end domestic consumers,” read the statement.

In its November report, KPMG India said rooftop solar, combined with storage, will be cheaper than grid power after 2022..

India to build its heaviest rocket to carry 10-tonne satellites Indian Space Research Organisation (Isro) plans to build its heaviest rocket, which can carry satellites weighing 10 tonnes into space.

Currently, the space agency’s

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geosynchronous satellite launch vehicle (GSLV MK-2) can carry satellites weighing only two tonnes.

The proposed rocket would be powered by a semi-cryogenic engine — that runs on kerosene and liquid oxygen, which the space agency is currently developing. Semicryogenic engines are environmentfriendly and bring down the cost of launches significantly. The design process for the semi-cryogenic engine has been completed and it is being built by Godrej Aerospace, which also makes the Vikas engines for Isro’s rockets.

“Once we have this engine, we will have different levels of launch vehicles possible. Currently, the GSLV MK-3 uses the CE20 engine and once we put the semi cryogenic engine in such a combination, we will have a much bigger rating, which will have a payload capability of 10 tonnes,” said S Somanath, project director of the GSLV MK-3 at Isro. He, however, did not set a timeframe for the rocket development.

Last year, Isro tested a demonstrator of its heavier class of rocket, the GSLV MK-3, designed to carry four-tonne class communication satellites into space. The CE20, which the rocket uses, is an indigenously developed cryogenic engine. A full-fledged rocket with a communication satellite will be launched in 2017.

“One of the launch vehicles will look like the GSLV MK-3, but it will be much taller, almost 65 metres, weighing 732.6 tonnes at lift-off and it is capable of putting a 10-tonne space plant in the communication orbit,” said Somanath. Isro currently sends its four-tonne communication satellites, used for satellite broadcasting, on Arianespace rockets of the European Space Agency.

Somanath said Isro would work on a modular vehicle approach, using the same platform to extend the power of its rockets than build separate rockets.

“We thought we will go in a modular way. It will be possible for nearly 6-tonne payload capability and, if

required, we will be able to change to our full 10-tonne launch vehicle with a little bit of addition,” he said.

Meanwhile, Isro will launch its fifth of the seventh regional navigation satellite on January 20. The satellite will be part of India’s constellation of geo-positioning satellites that would help in disaster management, mapping and navigation, said M Annadurai, director, Isro.

Kochi Metro gets first set of ‘made in India’ coaches Kochi Metro Rail Ltd (KMRL) has received the first set of ‘Made in India’ coaches which were ordered in August 2014, five months ahead of schedule from Alstom Transport which is the rolling stock manufacturer for the project. The company is responsible for the design, manufacturing, supply, installation and commissioning of 25 standard track gauge trains. Union Urban Development minister Mr M. Venkaiah Naidu flagged off the first train set at an official ceremony held at the Alstom’s facility in Sri City Special Economic Zone (SEZ) in Tada in Andhra Pradesh.The Kochi Metro coach has differentiated itself with any other metro system by fitting two air conditioning units per car for the comfort of commuters. The 25 coaches would run on an elevated metro rail network 25 km long and 22 stations across Kochi. The metro line is expected to be open by end of 2016.

Mobile phone subscribers in India cross 1 billion India has become the only country in the world after China to cross one billion mobile phone subscribers.

The number of mobile phone subscribers in India reached 1.03 billion in October 2015, up 0.7 per cent from the previous month, as per the data from the Telecom Regulatory Authority of India (TRAI).

The size of India’s mobile subscriber base is now more than triple the US population. The competition in the telecom industry is also high, as there

are 12 telecom operators in India competing for subscribers. Bharti Airtel, India’s largest carrier, has more than 200 million subscribers. The launch of Reliance Industries Ltd’s US$ 15 billion fourth-generation services in early 2016 is expected to intensify the competition further.

Investment in an Indian start-up every 8 hours Indian start-ups raised $5.5 billion (Rs 36,000 crore) from venture capital (VC) firms and angel investors in 1,096 deals during 2015, as they looked to participate in the country’s economic growth story, according to VCCEdge, the research arm of online publisher VCCircle that tracks start-up funding.

Nearly two-thirds of the investments or 632 deals were made by angel and seed investors, pitching in with small funding in the initial stage of the start-ups. Angel and seed investors funded $313 million in 2015. VC investments stood at $5.18 billion in 464 deals, said the study reported on techcircle.in. In fact, there was an investment in an Indian start-up every eight hours. The share of private investments contributed by angel and VC firms in India rose to 25.4 per cent in 2015, compared to 17.2 per cent during 2014. Private equity investments in India clocked in at $11.8 billion, lower than its peak of $12.5 billion in 2012.

A higher-than-ever number of Indian start-ups raised money for the first time in 2015 — 695 deals involving companies that had never raised capital before were completed this year, compared to 374 deals in 2014.

Even more interesting is the growth of the number and total deal value for follow-on investments in 2015.

There were 66 deals worth $189 million in the year, compared to 15 deals worth $15 million in 2014, signifying that the gap between funding rounds raised by startups is getting closer. Follow-on investments are those made within a year of a company raising its initial seed capital.

The news of healthy growth on India Newsletter • 7

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the investment front in the Indian startup space comes despite a funding crunch in the market, fuelled by investors cracking the whip on startups that were burning cash to grab eyeballs.

In October, Nikesh Arora, vicechairman of Japese VC firm SoftBank which has made some of the most big ticket investments in Indian startups, warned Indian startups that they should focus on building good products rather than funding their own growth.

India to be leader among major economies in 2016 World Bank Senior Vice President and Chief Economist Kaushik Basu said India would be the leader among large economies not just in 2015 but was also expected to lead the pack even in the year 2016 in terms of economic growth.

According to Basu, the country’s growth rate would be in the range of 7-7.5 per cent as has been maintained by the World Bank in its previous forecast. The multilateral lender will put out its next half yearly economic forecast for India on January 7, 2016.

“I don’t know which way it will go(in the ensuring forecast) but it would be roughly in the ballpark range of over 7 per cent or between 7 and 7.5 per cent. No matter where it is-either the top end of it or the bottom endIndia will still be the leader among major economies. There are a few smaller economies going faster but among the major economies India expected to be on the top not only in 2015 but we expect India to lead the chart in 2016 as well,” he said when asked about his assessment of the country’s economic performance in the light of varied opinions in this regard.

Speaking to media at the end of the valedictory session of 98 th annual conference of Indian Economic Association presided over by himself, Kaushik Basu said on the whole India was doing well except in the area of exports in the past one 8 • India Newsletter

year.

Notwithstanding the trend in the last 12 months on the export front, India has a great potential in the export sector, particularly in the export manufacturing sector, according to him.

“The opportunity in manufacturing sector is very high especially because now wages in China are rising. It is true that in the last 12 months we have not done well but the potential here is huge and Indian can do better,” said Basu, who was the Chief Economic Advisor for Government of India from December 2009 to July 201.

Stating that India’s ease of doing business has actually improved over last year, he said that this will also contribute in the long run to the exports.

Responding to a question on the impact of Fed rate on global investment flows, Kaushik Basu said the Indian exchange rate moved a lot when the first announcement was made in 2013 but that has not happened this time around. He said that this shows that in some ways India is a stronger economy, which will able to take the small rise in interest rates in the US. Earlier in his valedictory address, Basu cautioned that India should make demands on global capital without actually driving it away.

India and China were the two countries that had benefited out of globalisation while several others had lost out.

India’s growth was not just an outcome of reforms but the investments in higher education and engineering education in the past had resulted in the movement of Indians to countries like the US where 50 per cent of H1B Visas goes to Indians, according to him. Basu said that India’s take off from the year 1994 and 1995 was driven by the services sector while historically the country was not doing well in manufacturing sector.

India likely to top world’s growth chart: Harvard study Projected to grow at 7%, India has the potential to be the world’s fastest-growing economy over the next decade till 2024, far outpacing China that could slow to 4.3%, says an influential study by Harvard’s Centre for International Development (CID) on the basis of the 2014 trade data, the latest available.

Helmed by Prof Ricardo Hausmann, who heads the CID and leads research for the ‘Atlas of Economic Complexity’, the study presents an optimistic picture for India based on increasing sophistication of its industry, ability to adapt to changing global demand and variety in exports.

“India has made important gains in productive capabilities, allowing it to diversify its exports into more complex products, including pharmaceuticals and even electronics,” Prof Hausmann says in a press release.

Hausmann notes that India’s recent gains in complexity of its economy along with an ability to continue improving will drive higher incomes.

“This will position India to lead global economic growth over the coming decade,” he says.

Arguing that gains in economic complexity have historically translated into higher incomes, Hausmann says China has already realised these benefits and has doubled per capita income in less than a decade.

Along with growth projections, the CID released new country rankings in the 2014 economic complexity index, which incorporates data stretching back to 1962, that places India at the 42nd spot but notes an improvement by five positions.

The rankings continue to see Japan, Germany and Switzerland leading the table while the UK, the US and France (10th, 13th and 16th) have all slipped. Oil economies like Venezuela have slipped the fastest, supporting the notion that a surfeit of mineral wealth can be a curse as

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it makes governments lethargic and encourages rentierism.

Southeast Asia and sub-Saharan Africa have the top gainers clocking fast per capita growth. This includes China that has climbed an impressive 16 positions to 17th — even though its long-term prospects are dimmer — and South Korea at 4th having gained 11 positions.

Govt plans to prioritise projects for conservation of water resources With the year 2015 drawing to a close, the Centre has proposed to give a new push to managing the country’s water resources by prioritizing its activities for 2016 when it will look beyond Ganga to initiate new projects and complete the ongoing ones.

Setting up of the National Bureau of Water Use Efficiency, modernization\ expansion of flood forecasting network of the Central Water Commission (CWC), completion of the contentious Polavaram project in Andhra Pradesh and launching Yamuna rejuvenation plan are some of the key proposals which are to be taken up by the water resources ministry in a big way in 2016.

Enlisting under proposed initiatives, the ministry, in its year-end review note, mentions rejuvenation of Yamuna among other things.

Though cleaning of the river has been going on since 1993 when the Center had started the Yamuna Action Plan (YAP), it has so far not produced a desired result due to a huge gap between demand and availability of sewage treatment capacity and lack of fresh water in the river.

Idea of the Yamuna rejuvenation on the lines of the ongoing ‘Namami Gange’ (Ganga rejuvenation plan) will be to come out with desired results in 2019.

It is, however, not yet clear how the Yamuna rejuvenation plan would be different from its existing action plan which has already spent Rs 1514 crore and has been in the

process of implementing various projects worth over Rs 3230 crore in Delhi and Haryana.

“Yamuna under the rejuvenation plan will get more focused attention,” said an official while referring to the Ganga rejuvenation schemes which -- despite the existence of the Ganga Action Plan (GAP) in the past -- have got special impetus and taken a shape of people’s movement to clean the river under the Prime Minister Narendra Modi government.

The ministry has also listed a proposal to set up an autonomous body to devise ways for optimum utilization of water by various sectors including public utilities. The body - National Bureau of Water Use Efficiency - will be set up on the line of Bureau of Energy Efficiency (BEE) to control and regulate efficient use of water. It will work to stop leakages through propagating best practices of water use.

It was first proposed under the UPA government in 2013. But, it could not take off despite the urgency to have such body for water conservation. The proposed move to set up this body in 2016 assumes significance when most of the options of harnessing available water in the country have already been utilized.

German steel giant ThyssenKrupp eyes India’s power sector ThyssenKrupp India, the diversified German multinational which had recently voiced its interest in pitching for India’s upcoming submarine contracts, has now expressed plans to make super critical boilers for the domestic power sector through strategic collaborations with a foreign company.

The Essen-headquartered engineering conglomerate will make the high-grade environmentfriendly boilers, which use less fuel, either at its Pune or Hyderabad plants and is currently scouting for an ideal international partner to collaborate which will soon be its

future growth area, CEO Michael Thiemann said in an interview.

“We are looking at all potential partners. It could be a Finnish expert or any other company. This is still at the planning stage but very much a part of our growth program for India,” he added. Boilers are an integral part of thermal power plants and constitute almost a third of the cost of such projects which typically have a benchmark of about `6-8 crore for generating one megawatt of power.

Boiler manufacturing caught up fast in 2006 when Indian companies rushed to join hands with foreign companies to tap India’s growing needs for power. The trend also saw the government announce a multitude of so-called mega power projects – with a minimum capacity of 4,000 MW – that later was scaled down due to fuel scarcity and liquidity problems for power distribution companies. Indian engineering giant L&T tied up with Japan’s Mitsubishi in 2007 and is now one of the leading private contractors for power projects, apart from state-owned NTPC and BHEL. ThyssenKrupp which had entered India by acquiring Raymond’s steel unit near Nashik in 2000, now wants to bet more on high value industrial solutions including defence, aerospace and elevators, while reducing the exposure on steel. This is part of a unified global plan for ThyssenKrupp which has also identified India as a growth area that could also house increased manufacturing operations for the group. In fact the global board of ThyssenKrupp is slated to meet in India soon.

The shift in focus is paradigm.

“Five years back, steel was 60% of ThyssenKrupp’s business. Today it is at 30%,” said Thiemann, signaling how one of the world’s largest steel makers is adapting to address price volatility and leveraging on engineering expertise to grow in the defence sector.

ThyssenKrupp had recently expressed interest in collaborating India Newsletter • 9

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with Indian partners to pitch for the `60,000-crore upcoming submarine contracts and has been talking to private shipyards including L&T, Anil Ambani’s Pipavav and state-owned Hindustan Shipyard and Mazgaon Docks.

To bolster its ageing underwater combat fleet, the Indian government will soon issue tenders for the construction of six stealth submarines, through the ‘buy and make in India’ process that allows Indian companies to tie-up with foreign collaborators.

This is in addition to the six Scorpene submarines currently being constructed at Mazgaon Docks.

Roads lead the way in government spending Government expenditure on road projects continues to score over other areas of infrastructure spending. Infra-Track, a report by Emkay Global Financial Services Ltd, points out that in November alone, roads comprised 59% of the tenders issued. This represents a growth of 62% in value terms over the yearago period.

And this trend holds true not just with tenders issued. Contracts, too, have been awarded at a rapid pace in this segment. However, there is a shift towards engineering, procurement and construction (EPC) options.

Analysts say that hybrid options for project funding are coming to the fore, where government and private firms share the cost in a 40:60 ratio. This is expected to ease cash flow pressures on construction companies.

Competition, too, is easing. The Emkay reports say that in the EPC projects, out of the 35 projects awarded, 13 were bid at a discount of 1-20% to benchmark cost, two at par, while 12 projects went at a premium of about 1.4-28%— something that was not seen in the recent past.

Note that while the railways recorded a huge jump in November, compared with a year ago, tendering activity has been very erratic.

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Among the other segments, water supply and community service tenders increased reasonably, while the power distribution segment was subdued.

Foreign investment in financial services more than doubles Foreign investment in India’s financial services sector rose sharply in 2015, led by interest in retail service providers and a higher cap for foreign investment in the insurance sector.

Data compiled by VCCEdge, the financial research arm of VCCircle and Grant Thornton India Llp, show that deals worth $3.8 billion were closed in the financial services sector this year, more than twice last year’s $1.6 billion. The data includes inbound mergers and acquisitions (M&As) and purchases by foreign private equity funds.

While some deals were driven by the higher foreign investment cap in insurance allowed since March, investors also sought to get exposure to the retail financial services sector, which they expect will grow as penetration of financial products deepens.

“Financial services is an attractive investment asset class for foreign investors because it provides them an opportunity to tap the growing middle class and the high-net-worth individuals. Most deals in this sector have happened where companies are more focused towards the retail play rather than the wholesale market,” said Ajay Saraf, executive director, ICICI Securities Ltd, adding that investors are keen on wealth management service providers and retail brokerages with strong distribution networks.

One of the largest foreign investors in India’s financial services this year was billionaire Prem Watsa, whose Fairfax Financial Holdings Ltd invested in Quantum Advisors Pvt Ltd and IIFL Holdings Ltd. Earlier this deal, Fairfax invested an undisclosed amount in Quantum, which advises and manages the India allocations

of foreign portfolio investors. IIFL is a diversified financial services company with a major focus retail investors. Fairfax invested $211.38 million to acquire a minority stake in IIFL in July, according to VCCEdge.

In the same month, French bank BNP Paribas SA acquired retail brokerage firm Sharekhan Ltd for nearly Rs.2,200 crore (about $345 million at the average exchange rate of Rs.63 per dollar in July). In August, it bought out its partner in BNP Paribas Sundaram Global Securities Operations Pvt. Ltd for Rs.44.30 crore, according to Grant Thornton’s deal database.

Non-banking financial companies (NBFCs) and housing finance firms have also seen strong interest from private equity funds. Deals in this segment include Apax Partners Llp’s $384.55 million investment in Shriram City Union Finance Ltd and Bain Capital’s $198.47 million deployment in L&T Finance Holdings Ltd. SME (small and medium enterprise) finance is also a segment that is attracting a lot of foreign investment, said experts.

“We are seeing that a lot of growth capital coming in to fill in the gap where traditionally credit was lacking.

Whether it is affordable housing loans, SME loans or the microfinance sector, foreign investors, particularly PEs (private equity investors) are keen to invest in these areas,” said Abizer Diwanji, partner and national leader at audit and consulting firm EY, adding that these business models have matured now, and so, risks have reduced.

Several transactions were seen in the insurance sector as well after the foreign investment limit in the sector was raised to 49% from 26%.

At least Rs.10,000 crore in deals have been announced, according to data compiled by Mint. The largest such transaction saw Nippon Life Insurance Co. buying Rs.2,265 crore in Reliance Life Insurance Co. to raise its stake to 49%. At least 11 more deals have been closed.

According to a report by India Brand Equity Foundation, between

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April and September 2015, the life insurance industry recorded a new premium income of $8.4 billion, indicating a growth rate of 14.45%.

The general insurance industry recorded a growth of 12.6% in gross direct premium underwritten in fiscal year 2016 till October, at $8.23 billion.

The life insurance sector is expected to grow at a compound annual growth rate of 12-15% over the next five years, the report added.

“Most of the Indian insurance companies are dependent on their foreign partners on the product side and most of the foreign insurance firms were looking for this opportunity to up their investments,” said Kalpesh Mehta, partner at Deloitte Haskins and Sells, India.

In January-September, Total foreign direct investment (FDI) flows into India increased to $26.51 billion from $22.43 billion during the same period last year.

Many believe that investing in financial services is a good way to capture any upturn in the economy.

Falling inflation and interest rates, along with strong regulation, also continue to attract investors to this sector.

“People are paying little bit higher than fair value as we expect growth in assets under management and net incomes to pick up soon,” said a fund manager who has invested in an NBFC, requesting anonymity.

Private equity investors consider the Indian financial services sector as a safe bet.

“The fact that the sector has a strong regulator and fewer corporate governance issues is an added advantage,” said Deloitte’s Mehta, adding that sectors such as real estate and infrastructure come with higher risks.

1000 companies may be part of Make in India week The Department of Industrial Policy and Promotion (DIPP) is hoping that the ‘Make in India’ initiative will provide momentum to the domestic companies as well as increase the share of manufacturing in India’s GDP to 25% from about 17% at present. In order to give a boost to the initiative, the government plans to hold a ‘Make in India week’ in Mumbai in February 2016.

The event will see the participation of over 1,000 companies, DIPP secretary Amitabh Kant said.

“Despite the global slowdown we must continue to liberalise economy and grow foreign direct investment by 30%...We have vigorously opened up economy for FDI,” Kant said, making a case for domestic manufacturing.

Kant said that Make in India 2.0 will be instrumental in the growth of manufacturing in the country and through focus on labour intensive

areas it will add to employment opportunities as well. “Countries such as the US and UK have 33% of GDP coming from manufacturing and the share is now declining and moving towards services... We have grown on the back of service industry...when in the development stage India should focus more on manufacturing,” he said.

With research and development one of thrust areas of Make in India, Kant said that the time is ripe for India to get the best technology from Europe for making hybrid and green automobiles.

“The movement of such technology to India needs to be accelerated if we want to achieve low levels of emission and tackle the menace of pollution,” he said.

‘Make in India week’, to be held from February 13-18, will focus on ten key sectors,including aerospace and defence, automobile, construction, food processing, infrastructure, pharmaceuticals, information technology and textiles.

It will feature exhibition of innovative products and manufacturing processes, a hackathon and sessions on urban planning, among other events. Prime Minister Narendra Modi had launched the Make in India programme on September 25, 2014 in the presence of over 120 chief executives of major Indian companies.

INDIAN EMBASSY LIBRARY ■■ The Embassy’s library is opened daily from 10am to 1pm without appointment.

■■ Our collection contains more than 2000 titles in dozens of categories.

■■ For appointments outside the opening hours or other inquiries, please contact us under info.vienna@mea.gov.in or 015058666 33 ■■ Download our latest catalog of books under indianembassy.at/pdf/ EmbassyLibrary.pdf India Newsletter • 11

Indian Embassy, Vienna

MAKE IN INDIA Summary ■■ USD 146 Billion – expected 2015 revenues.

IT & BPM

■■ USD 200 Billion in savings for companies in the last five years.

■■ 640

offshore

development

centres for 78 countries.

■■ USD 300 Billion industry by 2020..

Reasons to Invest ■■ The IT-BPM sector constitutes 9.5% of the country’s GDP and contributes significantly to public welfare.

■■ India’s IT industry amounts to

■■ The IT-BPM industry is the largest

55% of the global market, largely

private sector employer – delivering

due to exports.

3.5 Million jobs.

■■ 60% of firms use India for testing

■■ The sector accounts for 38% of

services.

India’s services exports. urban

■■ The sector includes 640 offshore

infrastructure has fostered several IT

development centres (ODCs) across

centres in the country.

around 78 countries.

■■ The Indian IT industry has saved

■■ India is ranked as the 9th largest

clients USD 200 Billion in the past

start-up hub in the world with over

five years.

3100 start-ups in the country.

Statistics

Growth Drivers

■■ IT-BPM revenues are expected to

■■ Emerging

reach USD 146 Billion in 2015.

verticals, non-linear growth due to

■■ Exports from the IT-BPM industry

platforms, products and automation.

are expected to reach USD 98.5

■■ Revival in demand for IT services

Billion in 2015.

from US and Europe.

■■ IT Services exports are USD 55

■■ Increasing

Billion.

technology

■■ The BPM industry exports are

consumers and focused government

USD 20 Billion.

initiatives – leading to increased ICT

■■ The hardware industry exports

adoption.

are USD 0.4 Billion.

■■ High-value

■■ The IT industry has more than

bigger than USD 1 Million – the

15,000 firms; of which 1000+ are

highest in the last five years,

large firms.

registering 13.5% growth.

■■ Rapidly

12 • India Newsletter

growing

geographies

adoption and

telecom

client

and

of by

additions

■■ Emerging verticals (retail, healthcare, utilities) are driving growth above 14%.

■■ India has been creating a futureready digital workforce, with more than 1,50,000 employees SMAC skills.

■■ More than 50,000 employees are skilled in analysis, 30,000 people in enterprise mobility.

■■ The SMAC (social, mobility, analytics, cloud) market is expected to grow to USD 225 Billion by 2020.

■■ USD 1.6 Billion is spent annually on training workforce and growing R&D spend.

■■ The National Optical Fibre Network (NOFN) is being laid down in phases to connect all the 250,000 gram panchayats in the country.

■■ The government’s Digital India Campaign envisages a USD 20 Billion investment covering mobile connectivity throughout the country, re-engineering of government process via technology and enabling e-delivery of citizen services.

Indian Embassy, Vienna

FDI Policy

Financial Support

Investment Opportunities

■■ Up to 100% Foreign Direct

■■ KEY PROVISIONS IN BUDGET 2O14-15: ■■ Tax rate on royalty and fee for technical service payable to nonresidents has been reduced from 25% to 10%.

■■ Concerns of IT Industries for a more liberal system of raising global capital, incubation facilities in our Centres of Excellence, funding for seed capital and growth, and ease of Doing Business etc. would be addressed for creating hundreds of billion dollars in value.

■■ The National Optical Fibre Network Programme (NOFNP) to be further speeded up by allowing willing states to execute on reimbursement of cost basis as determined by Department of Telecom.

■■ Supporting technology driven start-ups - Creating of innovation Promotion Platform and Technofinancial and facilitation support scheme ■■ Self Employment and Talent Utilization (SETU) to establish as techno-financial, incubation and facilitation programme to support all aspects of start-up business.

■■ Transfer Pricing - Increase in Domestic Transfer pricing threshold from 5 Crores to 20 Crores.

■■ Reduction in tax rate on Royalty and Fees from Technical services from 25% to 10% ■■ CENVAT credit time limit for availment increased from 6 months to 1 year.

■■ GAAR deferred by another two years and will be implied prospectively.

■■ 2 days time for service tax/ excise duty registration; electronic filing including digital signature.

■■ Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of 20,000 crore, and credit guarantee corpus of 3,000 crore aiming to infuse funding among the new generation entrepreneurs.

■■ The setting up of IT services, BPM, software product companies, shared service centres.

■■ Fast-growing sectors within the BPM domain – knowledge services, data analytics, legal services, Business Process as a Service (BPaaS), cloud-based services.

■■ IT Services and fast-growing sectors within it such as solutions and services around SMAC, IS outsourcing, IT consulting, software testing.

■■ Engineering and R&D within which the fastest growing sectors are – telecom & semiconductors.

Investment

(FDI)

is

permitted

under the automatic route in data processing, software development and computer consultancy services, software supply services, business and

management

consultancy

services, market research services, technical

testing

and

analysis

services.

Sector Policy ■■ National Policy on Information Technology 2012 aims to increase revenues of IT and BPM industry to USD 300 Billion by 2020 and expand exports to USD 200 Billion by 2020.

The policy also seeks to achieve the twin goals of bringing the power of information and communication technology (ICT) within the reach of all its citizens while harnessing the capability and human resources of the country to enable India to emerge as the Global Hub and Destination for IT and BPM Services by 2020.

■■ OTHER INITIATIVES: ■■ National

Rural

Internet

mission (2017) ■■ -e-governance ■■ -ekranti - Electronic Delivery of Services (2017) ■■ Establishment of Software Technology Parks of India (STPIs).

■■ Special

Economy

Zones

(SEZ) Policy.

■■ National e-Governance Plan (NeGP).

■■ National

Cyber

Security

Policy 2013.

■■ Digital India Mission.

Foreign Investors ■■ Accenture (Ireland) ■■ Cognizant (USA) ■■ HP (USA) ■■ Capgemini (France) ■■ IBM (USA) ■■ Atos (France) ■■ Microsoft (USA) ■■ CDNS (USA) ■■ Intel (USA) ■■ Dell International (USA) ■■ Agilent Technologies (USA) ■■ Mentor Graphics (USA) ■■ Oracle Corporation (USA) ■■ Qualcomm (USA) ■■ Steria (France) ■■ Ricoh (Japan) ■■ SAP (Germany) ■■ TIBCO (USA) ■■ Philips (Netherlands)

Agencies ■■ Department of Electronics & Information Technology, Ministry of Communications & Information Technology, Government of India ■■ National Association of Software and Services Companies ■■ Indian Software Product Industry Round Table ■■ Other Service Providers Association of India ■■ Data Security Council of India India Newsletter • 13

Indian Embassy, Vienna

More info and registration: www.makeinindia.com/mumbai-week

14 • India Newsletter

Indian Embassy, Vienna

PERSPECTIVES ON INDIA MSME Sector: Epitomising Vitality Mr Deep Kapuria, Chairman, CII Trade Fairs Council The manifest capacity of Micro, Small and Medium Enterprises (MSMEs) around the world for driving economic growth and development at regional, national and global levels cannot be overemphasized.

As India gears up to retrace the high growth path, the MSME sector assumes a pivotal role in driving the growth engine. The MSME sector in India continues to demonstrate remarkable resilience in the face of trialing global and domestic economic circumstances. The sector has sustained an annual growth rate of over 10% for the past few years. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive economic shocks, even of the gravest nature. The significance of MSMEs is attributable to their caliber for employment generation, low capital and technology requirement, promotion of industrial development in rural areas, use of traditional or inherited skill, use of local resources, mobilization of resources and exportability of products. According to the estimates of the Ministry of MSME, Government of India, the sector generates around 100 million jobs through over 46 million units situated throughout the geographical expanse of the country. With 38% contribution to the nation’s GDP and 40% and 45% share of the overall exports and manufacturing output, respectively, it is easy to comprehend the salience of the role they play in social and economic restructuring of India.

Besides the wide range of services provided by the sector, the sector is engaged in the manufacturing of over 6,000 products ranging from traditional to hi-tech items.

■■ Performance of Indian MSME Sector The Indian MSME sector provides maximum opportunities for both self-employment and wage-employment outside the agricultural sector and contributes in building an inclusive and sustainable society in innumerable ways through creation of non-farm livelihood at low cost, balanced regional development, gender and social balance, environmentally sustainable development, etc.

■■ The Diversity of the Indian MSME Sector The MSME sector in India boasts of diversity in terms of its size, level of technology employed, range of products and services provided and target markets. MSME Tool Rooms have been credited to provide at least ten components that were used in India’s Mangalyaan (Mars Orbiter Mission probe), the Indian Space Research Organization’s (ISRO) most ambitious mission till date, which is the country’s first interplanetary space mission. The sector has also contributed vital inputs for other space satellites such as the Chandrayan. India’s second moon mission, Chandrayaan II, set to be launched in 2016-17, will have a soft land over a wheeled robotic vehicle to explore the landing area. India seeks to launch other ambitious projects like a global sea traffic monitoring system and an earth observation satellite, in cooperation with the EU. The projects envision significant contributions and convergence opportunities from the Indian MSME sector.

India is one of the world’s top ten countries in terms of military expenditure.

According to the database prepared by the Stockholm International Peace Research Institute, which has listed the countries of the world in terms of their military expenditure at current US$ millions in 2013, Indian

ranks ninth.

With spending in Defence and Aerospace on the rise in India, it is estimated to become the third largest market by 2020, after the US and China. Increasing passenger traffic and military expenditures are expected to boost demand for new aircrafts. Investment opportunities of US$110 billion are anticipated with US$80 billion in new aircraft and US$30 billion in the development of airport infrastructure by 2020, according to the Investment Commission of India. Many global companies are increasingly looking to Indian MSMEs for strategic partnerships of mutual benefit due to the innovative capabilities in niche manufacturing, comparative advantages of advanced engineering, low-cost manufacturing and overheads, ability to speedily absorb new technologies and local skills and capabilities that set these enterprises apart from other national and international players in the sector.

With its vast resource pool of engineering talent and high skill labour at competitive costs, India has the potential to become a significant player in the global auto industry, especially in engineering and component manufacturing.

India’s close proximity to key automotive markets like the ASEAN, Japan, Korea and Europe provide an added fillip to the sector. Exports of auto components increased at a CAGR of 17% during 2008-13, reaching USD 9.7 Billion in 201213. MSMEs assume a dominant position in the automotive and auto components sector.

Many more lucrative opportunities can be tapped by Indian MSMEs in the foundry industry, electronics industry, chemicals, leather, textiles, agro and food processing, pharmaceuticals, transport and tourism industries, etc. The globalization of businesses has increasingly drawn SMEs into global India Newsletter • 15

Indian Embassy, Vienna

value chains through different types of cross-border activities. Many entrepreneurs are recognizing the opportunities that this advent ushers and gaining access to global markets has become a strategic instrument for their further development.

These opportunities have arisen as a result of the government’s increased focus on the MSME sector, larger investments in research and development, technological upgradation, thrust towards international collaborations and measures to boost competitiveness and propel growth.

■■ Supportive Role of Government of India Recognizing the potential of this sector for the nation’s development, the Government of India, through its various agencies, has taken many key steps to strengthen the MSME sector and promote innovation and capacity building in this sector.

Regular dialogue is facilitated between various stakeholders through the constitution of specific task forces and inter-ministerial committees. The Micro and Small Enterprises­­­-Cluster Development Programme is being implemented by the government for the holistic and integrated development of these enterprises in clusters through soft interventions, hard interventions and infrastructure upgradation for enhancing their productivity and competitiveness.

During the year 2014-15, 43 new clusters have been taken up for various interventions. So far, around 966 clusters and 171 infrastructure development programmes have been initiated by the government.

Provisions are also being made to strengthen the framework of virtual clusters with an aim to assist MSME accessibility of the Ministry

16 • India Newsletter

from the remote location of their operation. The Credit Linked Capital Subsidy Scheme also assists in the technological upgradation on MSMEs. The National Manufacturing Competitiveness Programme is another flagship programme of the Ministry of MSME which endeavors to equip these enterprises with technology-based tools in the areas of quality upgradation, productivity, design development, energy efficiency and marketing. To ensure better flow of credit to SMEs, the Ministry has introduced a Policy Package for Stepping up Credit to Small and Medium Enterprises (SMEs) under which it operates schemes like the Credit Guarantee Fund Scheme and the Performance and Credit Rating Scheme.

■■ Initiatives for Nurturing Indian MSMEs by Confederation of Indian Industry (CII) For over 120 years, Confederation of Indian Industry has been persistently engaged in creating and sustaining an environment conducive to the development of Indian industry through advisory and consultative processes.

Confederation of Indian Industry has undertaken a slew of measures for supporting the development of the Indian MSMEs and enhancing their global competitiveness. The Indo-German Manager Training Programme (IGMTP), run with support from the Governments of India and Germany, aims at enhancing the international business and economic potential of Indian enterprises by bringing them in contact with German enterprises.

MSMEs have been guided to enhance their competitiveness through the time tested techniques of the Cluster Approach. Along with its strategic partners, about 245 clusters have been constituted by

far impacting over 3000 MSMEs. In partnership with the Overseas Human Resources Development Association (HIDA), Japan, Confederation of Indian Industry is operating a training programme on Production Management for Manufacturing in India to enhance production management capability in the Indian manufacturing industry in order to achieve the idea of “Make in India” through Japanesestyle Management. To enhance their leadership skills and awareness on diversity management as well as to provide them with networking opportunities, Confederation of Indian Industry also runs a training programme on the Empowerment of Women Leaders with HIDA. Confederation of Indian Industry has set up an online SME Finance Facilitation Centre to provide advisory and credit facilitation support to SMEs. ■■ Conclusion The Make in India Strategy adopted by the Indian Prime Minister Shri Narendra Modi aims to facilitate investment, foster innovation, enhance skill development and build a sustainable eco-system for the manufacturing infrastructure in the country. These measures have succeeded in raising the business confidence in India. The stage has been set through these industry and MSME interventions for a larger share of global business in India which presents opportunities for MSME integration in almost all industry sectors. The Indian MSME sector is poised for rapid growth and integration with major global value chains. Timely policy intervention and due support have promptly resulted in rendering the Indian MSMEs globally competitive.

Indian Embassy, Vienna

INDIAN TRADE FAIRS INTERESTED IN VISITING A TRADE SHOW IN INDIA? In case your company is interested in visiting a tradeshow/B2B event in India, be it one listed here or another one that came to your attention, get in contact with us via maoffice.vienna@mea.gov.in to get more information about possible assistance/subsidies.

India Newsletter • 17

Indian Embassy, Vienna

24-26 February 2016, Pragati Maidan, New Delhi, India Block your dates now 2nd Edition of Global Exhibition on Services (GES) The Government of India, Ministry of Commerce and Industry in association with Services Export Promotion Council (SEPC), India Trade Promotion Organization (ITPO) and Confederation of Indian Industry (CII) is organizing the second edition of the Global Exhibition on Services from 24 to 26 February 2016 at Pragati Maidan, New Delhi.

Highlights • Global Exhibition • Sector Specific Seminars • One on One Business Meetings • International Delegations • Networking Events • Cultural Evenings • Food Festival • Film Festival

www.gesdelhi.in 18 • India Newsletter

Indian Embassy, Vienna

T

he Council for Leather Exports (CLE), India is pleased to invite you to the 19th International Technical Footwear Congress of the International Union of Shoe Industry Technicians (UITIC) to be held during February 3rd to 5th 2016 in Chennai, India.

The UITIC has been a pioneer in the dissemination of technical developments and knowledge in the footwear industry by facilitating information exchanges between its members. UITIC’s main activity is to organize an International Technical Footwear Congress which addresses the latest technical issues and problems.

The Council for Leather Exports (CLE)-India is the Apex body for the international promotion and overall development of the Indian

Leather & Footwear sectors, and will host the 19th UITIC Congress. The Congress will be held in Chennai, capital of Tamil Nadu State which is home to some of the leading footwear clusters of India.

The Theme of the 19th Technical Footwear Congress is “Future Footwear Factory”. Advances in technology, design and information sciences have enabled the modernization of factories for producing footwear with advanced properties, making optimum use of resources. However there remains the perennial challenge of changing consumer demands and market vagaries. Also, today’s instantlyconnected world has ushered in a plethora of opportunities and challenges. Footwear factories have to adapt and improvise to

stay ahead in this dynamic scenario.

The 19th UITIC Congress aims to bring together technical experts, manufacturers, and stake holders of the Footwear industry, for a period of intense deliberations on the theme.

The long running and well-known India International Leather Fair (IILF), Chennai will take place on contiguous dates during January 31 – February 3 2016; adding further value to participation in the UITIC Congress.

The 19th UITIC Congress, Chennai is now open for Delegate Registrations We also invite papers of Technical Merit and relevant to the Theme of the Congress for selection for Oral and Visual presentations at the Congress.

INDIA IT SHOW 2016

India Newsletter • 19

Indian Embassy, Vienna

INVEST INDIA Federation House, Tansen Marg New Delhi—110 001 0091-11-23765085, 23487278 investindia@ficci.com www.investindia.gov.in

I

nvest India is the country’s official agency dedicated to investment promotion and facilitation. Set up as a joint venture between FICCI (51% equity), DIPP (35% equity held by the Department of Industrial

20 • India Newsletter

policy and Promotion, Ministry of Commerce & Industry) and State Governments of India (0.5% each), its mandate is to become the first reference point for the global investment community.

It provides granulated, sectorspecific and state-specific information to a foreign investor, assists in expediting regulatory approvals, and offers hand-holding services. Its mandate also includes assisting Indian investors make informed choices about investment opportunities overseas.

Indian Embassy, Vienna

TOURISM Shirdi - Little Town of Many Miracles

by Hugh & Colleen Gantzer.

The core miracle remains: clear and luminous.

He came from nowhere, vanished for a short while, returned and resumed his seat in a ruined mosque.

He asked for nothing, spoke little and his family and his past are still a mystery. Yet, in spite of the enigma of his origins, he radiated so much empathy, gave so much solace by his presence, that people were drawn to him for the comfort they received.

So, since they didn’t know his name, and he never revealed it, they gave him the respectful title of Sai Baba.

One interpretation of that is Revered Mendicant, but there are also many others. And as his devotees grew, so did the little village which he had chosen as his home.

When we first visited Shirdi at the start of our travel writing career, years ago, it was still a village: quiet, not very developed but centered around Sai Baba’s grave which had, naturally, become a shrine.

On our return recently, we found that Shirdi had retained very little of its old village character. We spotted a herd of cows meandering down its main street, but they had to manoeuvre between cars, autos and crowded buses. Upscale hotels rose where dhaba shacks had once stood and an iron fence sequestered the shrine complex: it reminded us of the one around Buckingham Palace without the gold assertions of royalty. Gold, however, did glitter in some profusion.

Above the sanctum, a golden tower rose. The sanctum, within, was framed in a golden arch beyond which redrobed priests sat on both sides of the Muslim savant’s grave and ministered to his garlanded statue, which they now accepted as an idol. His idol had a golden crown and it sat on a golden throne. This was in contrast to the grainy, blown-up, black-and-white

photographs of the Baba framed in the Museum. He had, always, dressed like a simple fakir and one of the displays holds his very humble personal possessions. The fire he had lit to cook a Sufi seer’s meal for his followers, still burned and its ash was treated as holi vibhuti. His growing mass of devotees now worshipped this unassuming ascetic as a god.

That is the second miracle: an Islamic seer, whose mosque is still venerated, who is now worshipped

by Hindus and who draws devotees of all faiths, all ages, all walks of life.

The term ‘national integration’, is a living, burgeoning, reality here. We saw it in the queues waiting to reach the sanctum, in the girls clustered at the tinsel-glittering shops, the treeshaded plaza where visitors rested.

Standing in the shelter of a neem tree rising above a small monument, we skimmed though a little booklet produced by the organization that manages this great charitable undertaking. It listed miracles reported by devotees who said that these were answers to their prayers to the Baba. At least one research scholar claims that the small monument at which we were standing marks the spot where the Baba had buried his mentor following the Sufi practice. This had been a forest then. A devotee told us that the leaves of this unusual margosa tree were sweet but pilgrims could not pluck them now because they had been protected by a fence to prevent eager visitors from denuding and killing the revered tree. We didn’t doubt that: the number of pilgrims have grown exponentially over the years.

Happily, so have the facilities offered to them by the trust.

We spoke to the Deputy Executive Officer of the Shri SaiBaba Sansthan Trust (Shirdi), Dr. Yashwantrao Mane.

He is one of the two government officials appointed to keep a watchful eye on the trust. Seventy thousand pilgrims visit the shrine ever day,

rising to 1,25,000 on Thursdays and weekends and soaring to 2 lakhs on festivals. To cater to this great influx of visitors, the state government set up the trust in 2004, taking over from the earlier private trust that had been in existence for 81 years.

Two years after the new trust took control, the Shri SaiBaba Hospital was inaugurated and three years later, in 2009, the ultra-modern Sri Prasadalaya dining complex opened its doors to pilgrims.

In the sunlit atrium of the hospital, relatives of patients stood in front of a statue of Sai Baba, singing bhajans in praise of the Baba. Heart Surgeon Dr. Vidyut Kumar Sinha told us that he had joined the hospital when it opened. Then they did only 3 open heart surgeries a month, today they do between 55 to 60 and up to 4 a day. We learnt, later, that though the world recovery rate for such operations is 90%, it is 95% to 98% in this hospital. The bhajan singers had completed their hymns and were walking past when they overheard the doctor’s conversation. Two of them stopped and said “It is all the grace of the Baba. He is still here, still watches over everyone in Shirdi!” A strong faith definitely aids recovery and in the IC ward, Jowar Srirang Nandlal, wired into an oxygen mask and monitoring instruments, nodded when we asked him if we could take his photograph. He had had his operation 24 hours before we saw him.

Some distance down the road, the great Prasadalaya dining complex spread. Standing in its manicured grounds was a covered pedestal holding a larger-than-life statue of Baba stirring an enormous cauldron of food. Mushrooming the roof of the Prasadalaya, rising behind the image of Sai Baba, was an array of huge dish antenna: or rather, they looked like dish antenna. In fact, they were solar collectors pumping the sun’s heat into the largest solar kitchen in the world, directly below.

India Newsletter • 21

Indian Embassy, Vienna

The corridor leading to the kitchen and dining hall held offices with CCTV screens focused on the crowds of pilgrims flocking into the Sai Baba shrine. Monitors, looking at the screens, assess the number of diners likely to eat in the Prasadalaya.

This is transmitted to the kitchen and the stainless steel kneaders, fryers and boilers are programmed accordingly.

Senior cook Kardele Pralhad told us that, on an average day, they boil 2,500 kgs of rice, 600 quintals of dal and a large quantity of cooked vegetables. In the huge dining hall, one batch of 1,000 diners had just left. Stainless steel thalis were collected, tables scrubbed, a mechanized sweeper swirled its brushes across the floor, squeegees and swabs dried them. An army of

apron-wearing

attendants

distributed clean thalis on the tables.

The next batch of diners entered, sat down on sturdy metal chairs, were served their meals from trolleys.

The turn-around takes half an hour, and 30,000 are fed on a normal day out of the many who queue up for the darshan in the sanctum. It is an efficient, hi-tech, operation.

It struck us then that though people who come to Shirdi donate generously to the trust, they have visible proof that their contributions are not being squandered or siphoned away. They believe that no one dares to betray their faith in the Baba because he still keeps a careful watch over his people. That belief, and its purifying consequences, is the most pervasive miracle of Shirdi..

22 • India Newsletter

Indian Embassy, Vienna

OVERSEAS INDIANS

The India Development Foundation of Overseas Indians (IDF-OI) is a not-forprofit Trust established by the Ministry of Overseas Indian Affairs which enables overseas Indians to contribute to social and development projects in India. The Trust is exempt from the provisions of Foreign Contribution Regulation Act, 2010 The Trust is chaired by Smt. Sushma Swaraj, Hon'ble Minister for Overseas Indian Affairs. Other Board members are prominent overseas Indians, eminent resident Indians and Senior Government of India officials.

How We Work Submission of Projects by Nodal Organisations to IDF-OI Assessment & Selection of Projects by IDF-OI Selection of a Project by Overseas Indian Payment made by NRI/PIO Project Implementation - Agreement Between IDF-OI & Project Implementing Agency Funds Transferred to Project Implementation Agency Regular Monitoring & Feedback to Contributors by Implementing Agency Project Completion & Utilisation Report to Contributor by IDF-OI

Engage With Us  You can select a project in totality or an individual component of a project as per state or sector of your preference.  Recognition to contributors: Board at project site acknowledging contribution of Overseas Indians.

Detailed Project Information: www.idfoi.org

“Although, the Indian Diaspora is a very heterogeneous group, there is a common factor which binds themtheir desire to maintain their connection with their homeland and to contribute to the social and development efforts in India. We are seeking to strengthen and deepen our relationship through IDF-OI.” Smt. Sushma Swaraj Hon’ble Minister of Overseas Indian Affairs & Chairperson, IDF-OI

Inviting Overseas Indians to Contribute to:

 Swachh Bharat Mission  Clean Ganga Mission  State Govt Projects Send your Contribution to ‘India Development Foundation of Overseas Indians’ State Bank of India, Central Secretariat Branch, North Block, New Delhi 110001 A/C no. 33819721882; IFSC code SBIN0000625; MICR 110002014

India Development Foundation of Overseas Indians 927, Ministry of Overseas Indian Affairs, Akbar Bhawan, Satya Marg, Chanakyapuri, New Delhi- 110021 Website: www.idfoi.org Contact: +91 11 26881052/24676210; Email: ceo.idf@moia.nic.in

India Newsletter • 23

Indian Embassy, Vienna

INDIAN MOVIE EVENING AT THE EMBASSY Due to limited capacity, seats will be given on a first come, first served basis. Therefore, you are highly encouraged to reserve your seats online at www.indianembassy.at, via email under maoffice.vienna@ mea.gov.in

Kai Po Che (Brothers...For Life) ■■ Synopsis: The story goes around the three friends who start a business, also providing coaching classes and tuition. Omi asks for help with his uncle, who is also a political leader, to start this business. Govind provides tuition classes to some children and Ishaan gives cricket coaching. They come to meet a boy, Ali who is gifted with hyper-reflex. Ishaan then starts special coaching for the boy so that the country gets a new star player. But unexpected things happen suddenly and the story takes a turn.

■■ Genre: Sport, Drama ■■ Directed by: Abhishek Kapoor ■■ Starring: Amit Sadh, Sushant Singh Rajput, Rajkummar Rao ■■ Released: 2013 ■■ Duration: 127 Minutes ■■ Language: Hindi ■■ Subtitles: ENGLISH ■■ Image Quality: STANDARD

Showtime January 22nd, 17:30 Indian Embassy Business Centre (1st Floor, Kärntner Ring 2, 1010 Vienna) 24 • India Newsletter

Indian Embassy, Vienna

NOTICE BOARD EMBASSY’S LIBRARY ■■ The EMBASSY’S library is opened DAILY from 10am to 1pm without appointment.

■■ For a complete list of books available in our library, visit our website www.indianembassy.at ■■ For scheduling an appointment outside the opening hours, please contact the information assistant under info.vienna@mea.gov.in or 01 505 8666 33

BUSINESS CENTRE ■■ The EMBASSY’S Business Centre is opened DAILY from 10am to 1pm.

■■ For scheduling an appointment outside the opening hours, please contact the commercial wing under the contacts given below.

■■ Marketing Officer: maoffice.vienna@mea.gov.in or 01 505 8666 30 ■■ Marketing Assistant: comm.vienna@mea.gov.in or 01 505 8666 31

STUDENTS WELFARE OFFICER ■■ Mr. Pawan T. Badhe, Second Secretary in this Embassy has been designated as Officer to look after welfare of Indian Students in Austria and Montenegro.

■■ His contact details are: 0043 1 505 866 15 and pol.vienna@mea.gov.in

MINISTRY OF EXTERNAL AFFAIRS GOES MOBILE ■■ Avail services : passport, visa, consular assistance ■■ Ask your Minister : on the go, anytime, anywhere ■■ Follow your PM : on his visits abroad ■■ Find the nearest Indian Mission/Post : for emergency consular assistance ■■ Be informed : about India’s Foreign Relations on the move and form your own opinions ■■ Know more : about how to undertake Kailash Manasarovar Yatra and Haj Pilgrimage ■■ Download and watch : pictures & documentaries on India ■■ Play and Personalize : what you need, when you need ■■ Share and contribute : your views, pics & suggestions

Ministry of External Affairs proudly presents “MEAIndia” – an integrated smart app for mobile and other hand held devices ‘MEAIndia’ is now available for download on App Store and Google Play Store..

FACEBOOK & TWITTER ■■ Our Facebook and Twitter pages target the India-Austria community and covers subjects such as Business, Culture, Embassy News, India-related events and programmes in Austria, and much more.

■■ We have reached the 9000 followers mark on Facebook!

■■ ‘Like’ our facebook page and be the first to know!

www.facebook.com/IndiaInAustria www.twitter.com/IndiaInAustria India Newsletter • 25