ABC News: K-A-P-U-T: Facebook Ditches Scrabulous

ABC News: K-A-P-U-T: Facebook Ditches Scrabulous

Facebook is set to release its own version of the popular word game Scrabble.When users click, they are taken to a note posted by the game's developers, Indian brothers Rajat Agarwalla and Jayant Agarwalla.

"Dear Friend, Please enter your e-mail address below to receive further updates. Your e-mail will remain with us and shall not be disclosed to third parties. Thank you! Rajat & Jayant."

The decision to remove the application came from the developers, not Facebook, the social network told "In response to a legal request from Hasbro, the copyright and trademark holder for Scrabble in the U.S. and Canada, the developers of Scrabulous have suspended their application in the U.S. and Canada until further notice," the company said in an emailed statement.

Outrage on the Facebook group "Save Scrabulous," the largest group of its kind -- more than 45,000 members strong -- was instantaneous. Fans of the game posted messages littered with words such as "madness" and "travesty," as well as several expletives, and encouraged fans to voice their displeasure to Hasbro, either by calling the customer service line -- or the company's CEO.

"I think this is a very dumb decision by Hasbro. For me and a number of our friends, we haven't thought about playing Scrabble for a long time ... I'll say Scrabulous got my interest in Scrabble again," Dominic Hung, a 28-year-old in Vancouver, British Columbia, wrote to ABCNews.com in an e-mail.

Derek Webster, a 35-year-old graphic designer from Toronto and 8-month player of Scrabulous, said he was disappointed that Scrabulous was pulled. According to Webster, the official online version of Scrabble has too many "bells and whistles."

Webster said he will be protesting via e-mail.
scrabulous
(ABC News/AP/Getty)

"I did send an e-mail off to the American and Canadian e-mail addresses just to say thanks, but no thanks" to the official Scrabble application released earlier this month on Facebook, he said.

Jason Madhosingh, the 30-year-old New Yorker that founded the Save Scrabulous group, says that Hasbro botched a chance to connect with a new generation of would-be Scrabble players.

"I think that the big loss here is that Hasbro has realy missed an opportunity to connec with a passionate fan base," he said. "The lack of engagement ... has an impact on brand preference and how strongly consumers feel about the brand and the company that delivers that brand."

As for the new Scrabble application, Madhosingh says he won't be installing it.

"I think it's something that I think was done in a way that alienated a large group of passionate fans and I'm unwilling to support that," he said.
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Some fans complained that they had problems accessing the official version of Scrabble -- released by Hasbro and video game developer Electronic Arts -- on Facebook today.

"We're working on some tech problems and Scrabble will be ready to play as soon as possible," EA spokeswoman Trudy Miller said in an e-mailed statement. "EA is monitoring feedback from fans, and we are already in the process of making changes that will result in a variety of improvements, including faster game play, leading up to the official launch scheduled for the first half of August."

Hasbro said it was "pleased" with the developments.

"We appreciate Facebook's assistance in expediting this matter. Hasbro has consistently stated that Scrabulous is a blatant infringement of Hasbro's Scrabble intellectual property rights in the United States and Canada," Hasbro said in a statement. "Mattel, holders of the SCRABBLE IP rights outside of the United States and Canada, several months ago also filed a suit which is awaiting a decision by the Indian court."

Scrabulous co-creator Jayant Agarwalla told ABCNews.com in an e-mail that the application was pulled in response to Facebook's concerns.

"We will sincerely hope to bring to our fans brighter news in the days to come," he wrote.

The Scrabulous fracas heated up last week when Hasbro, the owner of Scrabble in the United States and Canada, sued the Agarwalla brothers over intellectual property rights to the board game and asked Facebook to remove the popular application from its site.

In a statement issued late last Thursday, Facebook said it hoped the suit wouldn't discourage other developers from creating applications for the social network.
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More T-R-O-U-B-L-E for Scrabulous?

"Over the past year, Facebook has tried to use its status as neutral platform provider to help the parties come to an amicable agreement," a Facebook spokesperson said in a statement. "We're disappointed that Hasbro has sought to draw us into their dispute; nevertheless, we have forwarded their concerns to Scrabulous and requested their appropriate response."

Scrabulous is played much the same way as Scrabble and is among the top 10 most downloaded applications on Facebook, which has more than 90 million active users. It can also be played online at the brothers' Web site, Scrabulous.com. Despite the application's removal from Facebook, the Scrabulous.com site remained active.

Last year, Hasbro struck a deal with video game maker Electronic Arts to develop digital versions of classic board games.

That deal came to fruition in the past few weeks, as Hasbro launched an online version of the official Scrabble, also downloadable on Facebook.

Hasbro had been mum on what legal action, if any, it would take -- until last week.

"In deference to the fans, we waited in pursuing legal action until EA had a legitimate and better alternative available," Hasbro said in a statement.

Hasbro isn't the first company to bring a licensed Scrabble application to Facebook. In April, RealNetworks, an Internet software provider, launched Scrabble by Mattel on the social networking site. The application allows Facebook members outside the U.S. and Canada — or those who say they live outside the two countries — to play the real Scrabble.

Last year, RealNetworks struck a deal with Mattel, which owns the copyright to Scrabble internationally, to develop online casual games based on several Mattel board games, including Scrabble.

"We've been working with Mattel for a couple of months," RealNetworks spokesman Ryan Luckin said in April. "We do have a similar deal with Hasbro with online rights for Scrabble, so we'll continue to work with them as one of our partners."

Luckin said that RealNetworks is still in talks with the Agarwalla brothers; he declined to reveal details of those discussions.

"At the end of the day no matter what game is out there with a Scrabble trademark on it, it has to be approved by Mattel and Hasbro," he said. "So no matter what happens we want to work with them ... and also make this work for the Scrabulous guys as well."

Future Trouble for Facebook?

The situation calls into question a host of potential legal landmines for Facebook, which allows programmers to develop and upload all sorts of applications to the social networking site.

"The big issue here is what this implies for Facebook," said Tom Hemnes, a Boston-based attorney who specializes in copyright and trademark law. "If I were betting on this, if the case came to litigation or settlement, [I would bet] that Facebook would lose. They are indirectly associated with the name Scrabble to attract viewers to their site, and that would be trademark infringement."

FORTUNE: Techland Cuil not a Google killer - yet «

FORTUNE: Techland Cuil not a Google killer - yet «

Cuil not a Google killer - yet

By Yi-Wyn Yen

With hours of being launched Monday, Cuil - a new search engine created by former top Google engineers - was already being touted in the blogosphere as the next Google killer. But unless Cuil (pronounced ‘cool’) can develop an ad platform to rival Google’s, Cuil will have a difficult time challenging the search giant.

The comparisons to Google (GOOG) were inevitable. Cuil was founded by several lead engineers from Google, including Anna Patterson, chief architect of the company’sTeraGoogle search index. Cuil also claims its search algorithm scans through 120 billion web pages - three times the number that Google sifts through. And Cuil’s spare start page is reminiscent of Google’s minimalist home page.

The launch of Cuil certainly raised eyebrows at Google. Though the company would not comment on Cuil’s launch, Google’s web search team stuck it to the small search startup on Monday with a blog post that begins, “We knew the web was big…We’ve known it for a long time.”

Cuil representatives did not return phone calls.

Despite the buzz - and Cuil’s PR folks deserve credit for spinning this David v. Goliath story - it would be foolish to start arguing that Cuil will be the next big threat to Google.

“It’s a new kind of technology and platform that is going to unseat a company like Google - not a company that‚s trying to beat them at their own game,” says Scott Kessler, Standard & Poor’s Internet analyst.

Both Yahoo (YHOO) and Microsoft (MSFT) have been trying for years to make a dent in Google’s search business. Yahoo (a distant second) and Microsoft (and even more distant third) have spent billions trying to figure out how to close the gap on Google in the lucrative paid search market. Google’s paid search business made up 40% of all online search dollars in 2007, according to eMarketer.

Microsoft boss Steve Ballmer admitted last week to investors that Google has a huge advantage over other search engines because it delivers more relevant ads and has more advertisers in its system.

Yahoo has also admitted that it can’t beat Google at its own game. In June, Yahoo struck a deal with Google to run Google’s superior search advertising technology on Yahoo’s web properties alongside its own search results.

Cuil currently offers no ads on its pages. And the company claims it won’t monitor a user’s search habits in order to target advertising the way Google, Yahoo, and Microsoft do. That’s an ambitious goal. But one of the biggest advantages of Google has over its competitors is that it can provide better search results because it has its massive advertising platform supporting it.

“Google is receiving so many searches per second and gathering incremental information from new [auction] bids and new advertisements that the search engine gets more relevant and powerful,” Kessler say. “It’s self-perpetuating.”

Cuil, which has raised $33 million, could find its niche in search - or become an attractive acquisition for Microsoft, Yahoo or Google itself. The company says it will stand out because it delivers results with images in three columns and it will scour the web more aggressively than the other big search engines. So far, the site has been sporadically down because of the high volume of searches, which often happens to startups on opening day.

Malayala Manorama Indian Newspaper of Malayalam Language from eight places in Kerela

Sunday,27 July 2008 15:36 hrs IST

Arctic holds 90 billion barrels of oil

Washington: The area north of the Arctic Circle has an estimated 90 billion barrels of recoverable oil, the US Geological Survey (USGS) has said.

Included in the Artic bonanza is 1,670 trillion cubic feet of natural gas and 44 billion barrels of natural gas liquids, the USGS said in a statement posted on its website.

The Arctic Circle is the name given to the region around the North Pole. It includes the Arctic Ocean, the northern parts of Europe, Asia, North America and the Russian Far East.

The natural resources are distributed in 25 geologically defined areas thought to have potential for petroleum, according to the assessment, which is the first publicly available petroleum resource estimate of the entire area north of the Arctic Circle.

These resources account for about 22 percent of the undiscovered, technically recoverable resources in the world.

The Arctic itself accounts for about 13 percent of the undiscovered oil, 30 percent of the undiscovered natural gas, and 20 percent of the undiscovered natural gas liquids in the world.

About 84 percent of the estimated resources are expected to occur offshore.

"Before we can make decisions about our future use of oil and gas and related decisions about protecting endangered species, native communities and the health of our planet, we need to know what's out there," said USGS director Mark Myers.

"With this assessment, we're providing the same information to everyone in the world so that the global community can make those difficult decisions."

Of the estimated total, more than half the undiscovered oil resources are estimated to occur in three geologic provinces -- Arctic Alaska, the Amerasia Basin, and the East Greenland Rift Basins.

On an oil-equivalency basis, undiscovered natural gas is estimated to be three times more abundant than oil in the Arctic. More than 70 percent of the undiscovered natural gas is estimated to occur in three provinces -- the West Siberian Basin, the East Barents Basins, and Arctic Alaska, the assessment shows.

Till now, exploration for petroleum has already resulted in the discovery of more than 400 oil and gas fields north of the Arctic Circle.

These fields account for approximately 40 billion barrels of oil, more than 1,100 trillion cubic feet of gas, and 8.5 billion barrels of natural gas liquids.

Nano to cost Rs 1 lakh despite plant cost rise

The Statesman - Indian Newspapers in English Language from two editions.

Nano to cost Rs 1 lakh despite plant cost rise

KOLKATA, July 17: Tata Motors is expected to price its Nano at around one lakh despite cost escalation at their Singur plant but the one time tax you would pay during registration of your newly acquired Nano would go up by Rs 2,000 once the state Legislative Assembly gives its approval to the West Bengal Additional Tax and One Time Tax on Motor Vehicles (Amendment) Bill. The bill would be placed in the House tomorrow.
The one time tax, payable every five years would go up between Rs 2,000 and 10,000 once the existing Motor Vehicles Act is amended. Battery operated two wheelers and vehicles which enjoyed tax holiday so long would also be brought under tax net for the first time.
Tax on new vehicles with engine capacity of 900 cc owned by individuals or societies would be increased from Rs 8550 to Rs 10550. The Nano would have an engine capacity of 623 cc. The tax on motor cars up to 1490 cc would go up to Rs 13,900 and the special tax for air conditioned cars in this category would be another Rs 7,500.
Again for vehicles upto 2000 cc capacity engine the tax would be Rs 21,800 and the special tax would be nearly Rs 10,000. For vehicles with engine capacity of 2500 cc the tax payable would be Rs 25,000.
State finance minister Mr Asim Dasgupta had announced about the increase in tax during his Budget speech while claiming that this would bring in additional revenue of Rs 15 crore. n SNS

The Five Stupidest iPhone 3G Accessories (So Far) | Gadget Lab from Wired.com

The Five Stupidest iPhone 3G Accessories (So Far) | Gadget Lab from Wired.com


The Five Stupidest iPhone 3G Accessories (So Far)
By Danny Dumas EmailJuly 16, 2008 | 7:19:24 PMCategories: Avoid At All Costs, iPhone, Reviews

Another iPhone launch, another generation of multicolored condoms, holsters and other miscellaneous polycarbonate crap designed to waste your time and drain your money. As the accessory market for the first-gen iPhone aptly demonstrated, there seems to be no limit to the gimmicky, over-the-top and flat-out useless accessories companies can conjure up for the device. And while it's still early in the 3G game, here's our short list of products whose very existence angers us. We have a strange feeling this list will grow exponentially in the coming months. —Bryan Gardiner

[Editor's note: We've assigned each accessory an A-F grade with "A" being excellent and "F " being your standard epic fail.]

Vshell_iphone3gaction 1. The DLO VideoShell

Part see-through protective case, part iPhone 3G kickstand, the VideoShell saves you the trouble of actually holding your new iPhone, all 4.7 ounces of it. DLO says the stand/case will work on any flat surface. It

Grade: Lazy, transparent and useless. Fail.

$20, dlo.com

Iphone_home_cherry 2. The iWood

If the $200 or $300 you just shelled out for the iPhone, plus the minimum $1,680 you'll be paying over the lifetime of your AT&T contract didn't put enough of a hurting on your checking account, try Minot's iWood case. This ligneous shell costs nearly as much as the 8GB iPhone -- and rumor has it, it's fashioned from Ents! Optional wood dock sold separately. Seriously we're not making this up.

Grade: Chop down a tree to make an iPhone case? Great, I've got a car that runs on baby-seal blood and bald eagles you might like. Fail.

$125, miniot.com

Picture_8 3. Macally Privacy Screen Protective Overlay

You're an important person with an important phone…doing important things. Needless to say, you'll want some privacy while updating your Facebook profile. The Macally privacy screen overlay is just the ticket. Nosey onlookers out of the 60-degree viewing angle won't see a thing on your iPhone, including how horrible you are at Super Monkey Ball.

Grade: You suck at Super Monkey Ball, and by extension, at life. Fail.

$20, macally.com



Another vanity/utility hybrid gem of an accessory from Macally; this screen protector doubles as reflective mirror when your iPhone 3G screen is turned off. Are you more beautiful than your new iPhone? Buy one and find out.

Grade: Perfect for conceited douchebags who need to signal low-flying aircraft. Fail.

$10, macally.com

Speck 5. ClipPod Car Visor and Belt Clip

OK, this one is really an accessory for an iPhone accessory. So meta! Fifteen dollars will buy you a protective pouch for (…wait for it) your Bluetooth headset. Clip it to your belt or car visor and let everyone know how easy it is for you to throw money away.

Grade: An accessory for an accessory. What, are you trying to be ironic? No, you're being an idiot. Fail.

$15, speck.com

And because we're not a bunch of jaded, chain smoking bitter cynics, here's a list of the Top 5 iPhone 3G accessories we absolutely love.

Indian firms make killing out of clean technologies

tag: green business


Economic Times - Indian Newspapers in English Language from seven editions.

Indian firms make killing out of clean technologies
15 Jul, 2008, 0416 hrs IST,Nitin Sethi, TNN

Save Write to Editor

NEW DELHI: Investments in clean technologies are riding a green wave into India. In 2007, Green India Inc raised $1.4 billion through convertible bonds from the international market even as it picked up $628 million from the domestic stock market.

Indian companies are at the forefront of a trend in global investments in clean technologies like wind and solar power, an increasing drift of money from the developed countries towards developing economies of India, China and Brazil. The United Nations Environment Programme has revealed this in a recent report 'Global Trends in Sustainable Energy Investments'.

2007 was a breakthrough year for the Indian green energy corporates, they had never before garnered money from the global market through bonds, a fiscal device that provides medium-level security to investors. Convertible bonds appeal to investors in unsteady markets, as they provide a fixed return with capital appreciation.



While the bond market might have been a new venture for Indian companies, consummate in the well-established wind-energy market in the country, India attracted $2.5 billion for asset finance, up almost four times from the $671 million it had picked up in 2006. As a consequence, the country's wind power capacity grew by 1.7 giga watt in 2007.

Suzlon might have hit a snag with its new exports this year but the potential of the market continues to expand. Venture capital funds and private equity placements hit $265 million, slightly higher than the $236 million that Indian companies had attracted in 2006.

While wind power seems to be drawing most of the investments into India, the role of solar energy is bound to scale up substantially with the National Action Plan on Climate Change promising a ramp-up during the 11th and 12th plans, in both power capacity as well as solar power equipment production.

This push might help India match the substantially higher investments China is attracting at the moment, though clubbed together, the troika of China, India and Brazil are continuing to pull money to the 'South'. Put together, their share of new investment has grown from a paltry 12% in 2004 ($1.8 billion) to 22% ($26 billion) in 2007, an expansion by 14 times in a mere three years.

But, the UNEP report gives a perspective to these figures that otherwise might look impressive. They indicate the creation of a new market which has now found trust in investors but is yet far from its potential. The $145.6 billion of global investment in new renewables in 2007 was merely 9.4% of the total global energy investment and Europe and US were still attracting most of it.

ABC News: Mortgage Mess: IndyMac Bank Fails

ABC News: Mortgage Mess: IndyMac Bank Fails


Government Shuts Down Mortgage Lender IndyMac
Office of Thrift Supervision steps in and closes IndyMac Bank; FDIC takes over operations
By ALEX VEIGA AP Business Writer
LOS ANGELES July 11, 2008 (AP)
The Associated Press


IndyMac Bank's assets were seized by federal regulators on Friday after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures.

The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said.

The Office of Thrift Supervision said it transferred IndyMac's operations to the Federal Deposit Insurance Corporation because it did not think the lender could meet its depositors' demands.

IndyMac customers with funds in the bank were limited to taking out money via automated teller machines over the weekend, debit card transactions or checks, regulators said.

Other bank services, such as online banking and phone banking were scheduled to be made available on Monday.

"This institution failed today due to a liquidity crisis," OTS Director John Reich said.
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The lender's failure came the same day that financial markets plunged when investors tried to gauge whether the government would have to save mortgage giants Fannie Mae and Freddie Mac.

Shares of Fannie and Freddie dropped to 17-year lows before the stocks recovered somewhat. Wall Street is growing more convinced that the government will have to bail out the country's biggest mortgage financiers, whose failure could deal a tremendous blow to the already staggering economy.

The FDIC estimated that its takeover of IndyMac would cost between $4 billion and $8 billion.

IndyMac's collapse is second only to that of Continental Illinois National Bank, which had nearly $40 billion in assets when it failed in 1984, according to the FDIC.

News of the takeover distressed Alan Sands, who showed up at the company's headquarters in Pasadena, Calif., to find out when he could withdraw his funds.

"Hopefully the FDIC insurance will take care of it," said Sands, of El Monte, Calif. "I'm also kind of kicking myself for not taking care of this sooner, sooner as in the last couple of days."

ABC News: More T-R-O-U-B-L-E for Scrabulous?

ABC News: More T-R-O-U-B-L-E for Scrabulous?

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Home > Technology & Science
More T-R-O-U-B-L-E for Scrabulous?
Can the Old-School Board Game Compete With Online Copycat?
By ASHLEY PHILLIPS
July 7, 2008



First, members of Facebook fell in love with Scrabulous, an unauthorized, near-identical online copycat of the board game Scrabble; legal issues ensued.
scrabble
(courtesy electronic arts)

Now, after a months-long legal kerfuffle, game publisher Electronic Arts and Hasbro are striking back by launching a Scrabble application on Facebook by month's end.

Hasbro owns the rights to Scrabble in the United States and Canada. Last year, Hasbro struck a deal with Electronic Arts to develop digital versions of classic board games.

The companies will launch a Facebook application of the long-time word game by the end of July; an online version of the game is available now at Pogo.com.

The Scrabulous fracas began in January, when Hasbro tried to get the online copycat yanked offline. Scrabulous, which is played much the same way as Scrabble, was developed by brothers Rajat and Jayant Agarwalla in Calcutta, India. The game is among the top 10 most downloaded applications on Facebook and also can be played online at the brothers' Web site, scrabulous.com.

Despite that fight, the Scrabulous application is still available on Facebook.


Hasbro refused to comment on the current legal fight, spokesman Gary Serby told ABCNews.com in an e-mail.

"Hasbro has been consistent in stating that Scrabulous infringes upon our intellectual property, and we are keeping our legal options open," Serby said. "We have no further comment at this time on Scrabulous and our legal strategy going forward."

Earlier this year, Serby refused to comment on reports that Hasbro sent out legal notices to four parties involved in developing and hosting the game.

Hasbro isn't the first company to bring a licensed Scrabble application to Facebook. In April, RealNetworks, an Internet software provider, launched Scrabble by Mattel on the social networking site. The application allows Facebook members outside the U.S. and Canada — or those who say they live outside the two countries — to play the real Scrabble.

Last year, RealNetworks struck a deal with Mattel, which owns the copyright to Scrabble internationally, to develop online casual games based on several Mattel board games, including Scrabble.

"We've been working with Mattel for a couple of months," RealNetworks spokesman Ryan Luckin said in April. "We do have a similar deal with Hasbro with online rights for Scrabble so we'll continue to work with them as one of our partners."

The Statesman - Indian Newspapers in English Language from two editions.

The Statesman - Indian Newspapers in English Language from two editions.
Exchange of damaged currency

Press Trust of India
MUMBAI, July 7: Exchanging soiled and damaged currency notes with fresh ones has been made easier with the Reserve Bank of India asking banks to set up facilities in this regard at their branches.
Even the mutilated currency notes, with essential features intact, can be exchanged at designated branches of the banks, RBI said while issuing a Master Circular on exchange of notes and coins.
The Master Circular on exchange of notes and coins, issued after six years, asked banks to provide “customer services more actively and vigorously” by providing facilities for exchange of soiled notes at all branches.

The Skylimo: Helicopter pick up service in Bangalore

Caught in a jam? Heli-hop to your destination
- Chopper metro service launched in Bangalore, surgeon catches flight he would have missed
ANIL BUDUR LULLA


Bangalore, July 4: The southern city has got what many in the metros have desired: a pair of wings to beat the traffic.

Ask Dr David Rajan, who would have missed his 10.15am flight to Coimbatore from the new airport at Devanahalli had he taken the road.

At 8.50am, the sports medicine specialist and his assistant Kandaswamy were still in Electronics City, a good 66km and a three-hour road ride away.

But the 43-year-old doctor from Coimbatore, who was in Bangalore to carry out an emergency operation this morning, knew he would make it in time as he had booked himself on Skylimo, a first-of-its kind helicopter shuttle service in India between locations within a metro. The first commercial flight of the service lifted off today.

A similar service was planned in Mumbai but it never took off. Other cities have chartered chopper services but for rides to nearby towns.

For starters, the Bangalore service, launched by Deccan Aviation — which pioneered low-cost flying in India — is being offered from Electronics City to the new BIAL airport. Electronics City is a hub of IT and multinational companies with several super-speciality hospitals in the vicinity, whom Deccan Aviation wants to target as potential heli-hoppers.

By road, the distance to the airport takes anywhere between two-and-a-half hours and three hours if there is free passage. For software clients and top CEOs used to returning to base the same night or even taking a connecting international flight, the commute time is something they can ill afford. What they can afford is the Skylimo at Rs 5,800 per passenger for a one-way flight.

A one-way ride in a rented Mercedes or BMW costs nearly as much. Even a sedan like the Accent or Baleno will charge upwards of Rs 2,000. The fare in AC taxis works out to approximately Rs 1,000.

“The weather is the only impediment for helicopter operations. Otherwise, it’s an under-20 minute flight,” says Lt Col Rajendra Menon, a former army aviation pilot who commandeered the first commercial Skylimo flight today with three passengers.

The copter — a Bell 206 that can seat four — lifted off around 9, giving a spectacular view of the glass-fronted buildings around Electronics City, crossing the highway where the morning rush hour had already choked the arterial road and flying north towards Devanahalli.

The early morning weather was perfect for the flight and Dr Rajan wondered why the pilot was not following the highway to reach the airport.

“We are flying from south to north in an arc (through east), so we will avoid the city almost entirely and instead fly on its fringes. The distance is approximately 43km as the crow flies,” explained Menon.

Familiar landmarks slipped past as the chopper cruised. From 1,000 feet above, the old HAL airport resembled a ghost town — its terminals, apron, parking bays, cargo godowns, maintenance hangars and taxiway looking desolate. Just five weeks ago, it was a hub of activity with over 600 aircraft movements per day till the civilian air traffic shifted to the new airport. With poor connectivity and

the government struggling with oft-advanced deadlines to improve the

road to Devanahalli, a helicopter ride is the right prescription, especially for those who can afford.

“It’s a breeze,” exclaimed the usually calm Dr Rajan as he travelled at 180km per hour, whizzing over the clogged roads below. The surgeon had a harrowing time reaching the city from the airport yesterday morning as he was caught in one of the vicious traffic snarls Bangalore is becoming notorious for.

In the distance, BIAL loomed on the horizon as the helicopter flew over vineyards that Devanahalli is famous for. The copter settles comfortably into the large letter H marked on the ground. The total flight duration was 19 minutes, including 15 spent in the air, said Menon.

Kandaswamy looks anxiously at his watch, while Dr Rajan can't believe

it. His 10.15am flight to Coimbatore was still an hour away, this when he was struggling to reach the Electronics City helipad at 8.50 am.

A waiting Innova would take him and his assistant to the departure terminal, a minute’s drive.

Deccan Aviation plans to pick up and drop passengers at several city points –HAL airport, Palace Grounds, Whitefield and later even from UB City near Cubbon Park where a rooftop helipad is awaiting clearance.

Flying to the city points will cost a passenger Rs 4,800. Talks are on with HAL airport as it has become a defence airport now and needs to get special clearance to allow the Skylimo services.

The Palace Grounds, a vast lung space owned by the erstwhile Mysore maharajas, is embroiled in litigation over ownership. “As no permanent constriction activity

can take place, we are asking the owners to put up a temporary lounge

and maintenance room,” Deccan Aviation executive director Col

Jayant Pooviah said.

Pooviah expects Skylimo traffic to pick up towards the end of the year

as word gets around. “There are several IT companies who have come

forward to enquire. We are thankful to Infosys for letting us use

their pad and Bangalore International Airport Limited which gave us a separate area to set up operations,” Pooviah said. The company is willing to press in the larger Bell 407 which seats six passengers if bookings soar.

India's Economy Hits the Wall by Manjeet Kripalani

India's Economy Hits the Wall
Growth is slipping, stocks are down 40%, and foreign stock market investors are fleeing. Businessmen blame the ruling coalition for failing to make reforms

by Manjeet Kripalani
Asia


Just six months ago, India was looking good. Annual growth was 9%, corporate profits were surging 20%, the stock market had risen 50% in 2007, consumer demand was huge, local companies were making ambitious international acquisitions, and foreign investment was growing. Nothing, it seemed, could stop the forward march of this Asian nation.

But stop it has. In the past month, India has joined the list of the wounded. The country is reeling from 11.4% inflation, large government deficits, and rising interest rates. Foreign investment is fleeing, the rupee is falling, and the stock market is down over 40% from the year's highs. Most economic forecasts expect growth to slow to 7%—a big drop for a country that needs to accelerate growth, not reduce it. "India has gone from hero to zero in six months," says Andrew Holland, head of proprietary trading at Merrill Lynch India (MER) in Mumbai. Many in India worry that the country's hard-earned investment-grade rating will soon be lost and that the gilded growth story has come to an end.

Global circumstances—soaring oil prices and the subprime crisis that dried up the flow of foreign funds—are certainly to blame. But so is New Delhi. Much of the crisis India faces today could have been avoided by skillful planning. India imports 75% of its oil to meet demand, which have grown exponentially as its economy expands. The government also subsidizes 60% of the price of such fuels as diesel. In 2007, when inflation was a low 3%, economists such as Standard & Poor's Subir Gokarn urged New Delhi to start cutting subsidies. Instead, the populist ruling Congress government spent $25 billion on waiving loans made to farmers and hiking bureaucrats' salaries.
Botched Opportunities

Now those expenditures, plus an additional $25 billion on upcoming fertilizer subsidies, is adding $100 billion a year—or 10% of India's gross domestic product, or equivalent to the country's entire collection of income taxes—to the national bill. This at a time when India needs urgently to spend $500 billion on new infrastructure and more on upgrading education and health-care facilities. The government's official debt, which dropped below 6% of gross domestic product last year, will now be closer to 10% this year. "Starting last year, the government missed key opportunities" to fix the economy, says Gokarn. In fact, he adds, "there has been no significant reform done at all in the past four years"—the time the Congress coalition has been in power.

Even the most bullish on India are hard-pressed to recall any significant economic reforms made in the recent past. A plan to build 30 Special Economic Zones is virtually suspended because New Delhi has not sorted out how to acquire the necessary land, a major issue in both urban and rural India, without a major social and political upheaval. Agriculture, distorted by fertilizer subsidies and technologically laggard, is woefully unproductive. Simple and nonpolitical reforms, like strengthening the legal system and adding more judges to the courtrooms, have been ignored.

A June 16 report by Goldman Sachs' (GS) Jim O'Neill and Tushar Poddar, Ten Things for India to Achieve Its 2050 Potential, is a grim reminder that India has fallen to the bottom of the four BRIC nations (Brazil, Russia, India, and China) in its growth scores, due largely to government inertia. The report states that India's rice yields are a third those of China and half of Vietnam's. While 60% of the country's labor force is employed in agriculture, farming contributes less than 1% to overall growth. The report urges India to improve governance, raise educational achievement, and control inflation. It also advises reining in profligate expenditures, liberalizing its financial markets, increasing agricultural productivity, and improving infrastructure, the environment, and energy use. "The will to implement all these needs leadership," points out Poddar.

"We have a government in New Delhi with the best brains, the dream team," he says, referring to Oxford-educated Prime Minister Manmohan Singh and Harvard-educated Finance Minister P. Chidambaram. "If they don't deliver, then what?"
Disillusioned Business

More worried than most are India's businessmen, who have turned in stellar performances with their investment and entrepreneurial drive and begun to look like multinational players. For them, there's plenty at stake. But lack of infrastructure, from new ports to roads, along with an undeveloped corporate bond market and high prices for real estate, commodities, and talent, are causing them to hit "choke points and structural impediments all over. We will lose years," says Bombay investor Chetan Parikh of of Jeetay Investments.

Sanjay Kirloskar, chief executive of Kirloskar Brothers (KRBR.BO), a premier $470 million maker of water pumps, already has $100 million in overseas contracts. Yet few infrastructure contracts have come from New Delhi. Kirloskar had hoped to be part of a grand project linking India's rivers, but those plans have been on hold for four years. "The infrastructure growth we had hoped for has not come about," he says. "Instead, we will now expand overseas more than in India."

Such constraints on growth at home will have an impact. Corporate earnings growth is likely to dip, says Merrill Lynch's Holland, who now predicts just 10% growth, instead of the previous year's 20%. That slowdown makes it less attractive for foreigners to invest in India's stock market. Already this year, foreigners have taken $5.5 billion out of the market, compared with the $19 billion they invested last year. Gagan Banga, chief executive of India Bulls Financial Services, an emerging finance and real estate giant, points admiringly to China's ability to maintain its growth momentum for a decade, while India's has not been able to hold up for even three years. "Serious companies are going to grow at a much slower pace, and some may even de-grow this year," he says. Unless major policy decisions are made by New Delhi immediately to keep the economy on the growth path, he says, "India will slow down even further."

New Delhi defends its four year reign in India. "We've had 9% growth for four years in a row," says Sanjaya Baru, media adviser to Prime Minister Singh. "That is unprecedented." He attributes it to the increasing rate of investment, up from 28% of GDP to 35% currently, "close to most ASEAN economies," though he admits that a large part is from the private sector. "Yes, there is a fiscal problem, but there's a price to be paid for coalition politics," adds Baru. So having growth drop "from 9% to 7% is not grim."
Social Backlash?

Chetan Modi, head of Moody's India, says the increasingly high cost of doing business in India may force global investors who had set up base in India—especially financial-services players—to move to more affordable and efficient hubs, such as Singapore and Hong Kong. If the economy slows and inflation continues to accelerate, says Sherman Chan, economist at Moody's Economy.com, "social unrest is possible."

In fact, India is becoming a dangerous social cauldron. The wealth harvested by the reforms of previous governments has made itself evident in the luxury cars and apartments in India's big cities, leaving much of India full of aspirations but few means to achieve them. There is a severe shortage of colleges, yet a plan to build 1,500 universities gathers dust. The Communists in the ruling coalition are against both globalization and industrialization, so without new factories being built, employment growth has been almost stagnant, rising to just 2%—a disappointing rate in a country where an estimated 14 million youths enter the workforce every year, but just 1 million get jobs in the regulated, above-ground economy.

Meanwhile, few expect any bold moves New Delhi, especially with national elections due in 2009 and five important state elections scheduled before the end of this year. Thus far, the ruling Congress party's record has been poor; it has lost almost every state election this year and is likely to lose all five of the upcoming ones.

The big hope for a return to the course of reform in India, businessmen hope, will be a new government in New Delhi next year. The gravest danger is that India's messy coalition politics will bring into power another indecisive alliance that will keep the country in policy limbo for another five years. If so, says S&P's Gokarn, it's a meltdown scenario: growth slipping below 6.5%, accelerating the chances of India reverting to its 1991 status when it was plunged into a balance-of-payments crisis.

Kripalani is BusinessWeek's India bureau chief.

India's New Capitalists by Harish Damodaran Reviewd by CP Chandrasekhar

Frontline
Volume 25 - Issue 14 :: Jul. 05-18, 2008
INDIA'S NATIONAL MAGAZINE
from the publishers of THE HINDU




BOOKS

Roots of capital

C.P. CHANDRASEKHAR

India's New Capitalists: Caste, Business and Industry in a Modern Nation by Harish Damodaran; Permanent Black in Association with The New India Foundation, Ranikhet, 2008; pages xxiii+341, Rs. 695

Here is an important contribution to the still limited corpus of work on the evolution of India’s capitalist class.


INDIAN industrialisation or the emergence and growth of factory production has a long history, with its origins normally dated to 1854. Include large-scale trade and commercial services and the history of Indian business is even longer. Yet, Harish Damodaran argues, in his book (perhaps not too accurately) titled India’s New Capitalists, that Indian entrepreneurship has often been presented as being restricted to a few communities/castes traditionally linked with commerce and geographically concentrated in a few States and regions. This book takes a long-period, cross-country perspective to challenge this view.

Factually, it suggests, the evidence is to the contrary. To start with, during the colonial period, the post-Independence years and, perhaps, in heightened fashion over the past three decades, there was a more diverse set of entrepreneurs who made a mark in modern business than has been captured in extant business history. Quite a few of those entrepreneurs built empires that have sustained themselves and grown. They came from varied origins along very different trajectories, placed by Harish Damodaran in these major categories: those who followed the traditional ‘bazaar-to-factory’ route; and those whose experience reflects the not-so-traditional ‘office-to-factory’ and ‘farm-to-factory’ trajectories that “democratised” Indian capitalism and brought into business castes that were believed to abjure or were considered to be shut out of such activity.

The richness of the book lies in the multi-level structure it adopts to support this perspective. From secondary sources, primary material and interviews the author has garnered a wealth of material in the form of case studies that identify India’s diverse capitalists, their origins, their, often unusual, traverse to industry, the factors that influenced their success and the role of community links and organisations in ensuring the success of those who did succeed. Much of this material is woven into a narrative that can be taxing to absorb because of the detail, but is rich with information and insight. Some of it is in the form of case studies that highlight features that the author wants to draw attention to.

At various points this detailed micro-level narrative is broken to raise issues that belong to a second plane in the argument. Thus, Damodaran examines the role of Arthur Cotton’s irrigation works in improving the living standards and advancing the educational attainments of the monsoon-dependent and flood-prone Kamma peasantry of coastal Andhra, which in turn facilitated their movement into industry. He captures the role of “Cambodia” cotton, introduced in Kongunad in 1904, in triggering a process that resulted in the Gounders and Naidus, who were not the traditional mercantile communities of Tamil Nadu, playing a role in the conversion of the “landlocked” region around Coimbatore into the Manchester of the South and the location for a large number of foundries and engineering units. He analyses the factors that enabled the so-called “lower” toddy-tapping castes and communities such as the Nadars and the Ezhavas to take to commercial activity that varied from match and cracker production, through printing, to the manufacture of coir products and the hotel business.
Macro issues

This micro-narrative and meso-level discussion then forms the basis for investigating a number of “macro” issues. Why did the Brahmins of the North not display the same degree of entrepreneurial dynamism as those in the South and the West of the country? Why did the agricultural communities of the North demonstrate a similar failing when compared with their Southern and Western counterparts? And how has the solidarity ensured by caste and community relationships, which facilitated the emergence of a bourgeoisie among groups that were not traditionally commercial, been affected by the penetration of the capitalist ethic?

In answer to the first of these questions Damodaran refers to a host of “intertwined cultural, historical as well as economic factors”. The fact that the Brahmins of the West and the South were affected by the inroads of colonialism and those of the northern hinterland “were insulated from the winds of change blowing right through the late colonial era” shaped their entrepreneurial potential. The former took to modern education early and, therefore, could make up for what they lacked in capital “with their knowledge of English and technical education – important ingredients for establishing contacts and starting complex industries, often through foreign collaborations and licensing arrangements”.

When moving to his analysis of a similar difference between North Indian farming communities and their Western and Southern counterparts, the argument turns more structural. The environment in the West and the South is seen as having been conducive for the traverse from the field to the boardroom since the traditional mercantile communities, such as the Chettiars and the Komatis, exercised no decisive stranglehold over business. On the other hand, in the North the “Banias, Marwaris and Khatris have been ubiquitous in commodity and money markets”, which, according to Damodaran, “made the entry point for affluent capitalist farmers not terribly inviting even in areas such as agro-processing”. This could have played a role in the differential regional success of Brahmins as entrepreneurs as well.

The book concludes with the suggestion that the argument about the democratisation of Indian capitalism should not be pushed too far. As has been often noted, while there have been many instances of the emergence of a capitalist class among minorities such as Christians and Muslims, it has been, especially in the case of Muslims, much less than warranted by their share in the population and distribution across the country. And the democratisation of capitalism has stopped at the Dalit frontier: there is yet no clear sign of the emergence of a Dalit bourgeoisie.
A corrective

The terrain covered and the arguments advanced make Damodaran’s well-researched book an important contribution to the still limited corpus of work on the evolution of India’s capitalist class. It also serves as a much-needed corrective to the many biases that have characterised business history scholarship relating to India. But as any good book does, it leaves the reader thirsting for more. The book offers the reader a lavish diet of micro detail. Combining this with some more discussion of the fascinating meso- and macro-level questions that the author raises would have (perhaps) been a legitimate reward for a reader who has invested the effort to follow the rich (but unavoidably tedious) detail relating to the experiences of individual capitalists, their families and their communities. But then, one cannot ask for everything in a single book.

Finally, given the author’s project, it may have been useful to link the discussion to the rich post-Independence literature analysing the nature and evolution of the representative unit of capital in India, the business group. While there are references to the work of R.K. Hazari (but unfortunately not Aurobindo Ghose) and to the reports of the Monopolies Inquiry Commission and the Industrial Licensing Policy Enquiry Committee, these works are most often used to identify the rank of a particular group among the top business groups of the country. But there was a larger question which these studies explicitly or implicitly addressed: why was there a tendency for a few business groups to recur among the top few producers in a wide range of rudimentary industrial groups, and for them to account for a disproportionate share of assets and sales in the private corporate sector?

The answer to that question had many aspects, but one that was of particular significance was the ability of these traditionally dominant business groups to use state intervention, especially in the form of licensing, as an instrument to create barriers to the entry of new entrepreneurs. As a result, while new groups and entrepreneurs did emerge, theirs numbers were limited and they were very often restricted to new areas that were by definition not the bases of the traditional monopolies. This changed only when licensing was diluted or dismantled in particular industries or when certain new capitalists were able to influence or manipulate state policy. The implications of the complex relationship between the state and Indian capitalists (old and new) is an aspect that is substantially missing in the discussion in the book. But, as noted earlier, it would be wrong to look for everything in one place.

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