Monday, May 30, 2005

The Provident Fund nightmare

Financial Express: Account at a discount

The board of Employees Provident Fund Organisation (EPFO) has announced 9.5% interest for the year 2004-05.

EPFO collects money from the employees and employers into a pension fund. The government pays a small percentage per employee into the fund as well. This money is invested on safe instruments like Government securities and the income earned from these interestments are used to calculate interest payable to the individual accounts of the employees.

All companies of a size above a certain norm are expected to open an account with EPFO. For example, any establishment employing at least 20 people should enrol in the EPFO. [At New Horizon Media Private Limited we are voluntarily joining EPFO with a staff count of 12.] All cinema theatres with at least a staff count of 5 should join the EPFO. There are exemptions in specific industrial sector, cooperative sector etc. The EPFO website provides details on which establishments must statutorily join EPFO. The employer contributes a sum, the employee a part, while the Government adds a small amount, each month.

As the interest rate in the country has steadily fallen, the money earnt by EPFO fund has dwindled. While EPFO paid 12% interest on the deposits in the past, it is unable to do so now. One of the main reasons for this is the EPFO is unwilling to consider other forms of investment, particularly the stock market. This has turned into a political problem with the left parties and their unions wanting the restoration of the unsustainable 12%. It appears that based on the current earnings, the best interest rate possible is only 9%. However, for the last two years, the government has been dipping into the reserves to offer an extra 0.5%. These reserves were built up when the interest rates were high in the country. While the left leaning unions have welcomed the recent announcement of 9.5% they want the Government to pay the deficit (and not dip in to the reserves). P.Chidambaram does not want to help from the Finance Ministry, as that would make his life more difficult and the fiscal deficit will needlessly increase.

I personally think my money will earn more if given to a private company which is willing to take moderate risks. However currently there is no provision for one or two employees of a given organization to break away from the EPFO. In future, the private pension funds may be authorized to manage the provident funds. The Ministry of Labour may identify a few companies along with EPFO as authorized entities. Then, the employee and the employer are given freedom to choose one of these few - the ones they trust.

I have personally opted for a private pension fund as well and their earnings are comfortably above 12% year on year - quite steadily. This is for a highly conservative investment choice. For those with a riskier bent of mind, the earnings are higher.

These are some of the suggestions:

1. EPFO must consider investing part of their funds in Indian stock markets which have matured considerably. It could be just 5% of the EPFO fund to start with. This percentage can be increased slowly once EPFO directors are confident that employees money is not wasted.

2. EPFO can entrust this money with Public Sector Financial Institutions such as LIC, and pay LIC nominal fees for managing this fund. LIC has been a very shrewd investor in stock markets and has earnt considerable profits from its stock market operations. EPFO need not worry about lack of talent within its own ranks in dealing with the stock market.

3. Private companies must be allowed in to manage the Provident Funds of employees based on user choice. This will be seriously resisted by the leftists, rather senselessly as usual. There is ample evidence that money invested with private financial institutions are earning more than EPFO.

4. The Finance Minister should never allow the left demand that handouts be given from the Finance Ministry to cover up for the deficiencies and demands of EPFO. However, at the same time, unlike what the Financial Express insensitively says ("One option is to allow the financial mess that the board is creating to get worse and then to shut down the EPFO."), the EPFO should not be allowed to collapse. This will seriously hurt close to 40 million individuals. Instead EPFO should be reformed immediately and the only reform I can see are the ones listed above.

Tuesday, May 24, 2005

Will digital cinema deliver us good cinema?

Via ContentSutra: Financial Express: Is celluloid fading out?

There is a concerted move by a few companies on in Tamil Nadu to convert cinema theatres into digital capable multiplexes. Cinema theatres in the state with fairly large and valuable real estate were being converted into marriage halls because of lack of sufficient revenues. The digital cinema route could offer fresh lease of life to them.

Apparently 30 or so theatres in the state have already been made digital. This number could increase to 250 or so over the next year.

Another interesting thing is that there are plans to link the theatres through satellite connectivity. With this connectivity in place (basically any existing television channel can use its leased transponders to send digital cinema to all the theatres. The theatres will have to be equipped with the decoders and dish antennae.), the theatres can instantaneously receive new movies over the air, which can be stored and played a few times.

Today 99% of the Tamil films are shit. The producers work hard to please all sections of the population; pay atrocious sums of money to the lead actor (who may be nearing 60, paunchy, bald and generally boring yet can bring in his loyal audience to the theatres), shoot a bunch of songs at expensive and exotic locations from Afghanistan to Antarctic, deploy lavish sets, offer gratuitous sex and comedy ... - in short, everything except a good story. Since Tamil films almost entirely depend on theatrical collections in Tamil Nadu, no one wants to move away from the well-known formulae. In such a scenario, an odd good film here and there ('kaadhal') is all we can hope for.

If multiplexes allow for at least one small sized theatre hall - allowing say 100 people to sit at any given time, such theatres can be used to show niche, small-budget, good films. One can then take the risk of producing good films at a budget of about Rs. 40-60 lakhs. If 200 theatres with a hall capacity of 100 people can show these films at least 10 times, the average collections will be Rs. 1 crore (at Rs. 50 per ticket). This is not enough. The revenue generated should be at least 1.5 crores for all the people involved to break even. But it is getting closer. There is at least a workable business model. Digital filming reduces the cost considerably as well. There is near zero distribution cost. As more digital theatres join in, the cost of distribution goes down even further, while the revenue goes up considerably.

Once people start watching such films, satellite television channels may buy the satellite rights for a few lakhs.

Let us hope this happens. It is quite possible that in the next 2-3 years, more good movies will come up in Tamil.

Thursday, May 19, 2005

Partner the nation on the road to IT empowerment

CDAC has advertised in national dailies inviting software developers to join them in putting together language "Tools / Technologies / Resources" in all 22 official languages of India. They invite discussions from potential partners in the following areas: (their language)
  • Fonts - Trye Type Fonts and Open Type Fonts
  • Keyboard Drivers
  • Font Encoding Converters
  • Storage Code Converters
  • Open Office (Word Processor, Presentation Tool, Drawing Tool, Spreadsheet)
  • Browser
  • E-Mail Client
  • OCR's - Optical Character Recognition
  • Spell Checker
  • Dictionary
  • Thesaurus
  • Keyboard Typing Tutor
  • Language Learning Tool
  • TTS - Text to Speech System
  • ASR - Automatic Speech Recognition
  • Corpora - suitable for developer community
  • Machine Assisted Translation Systems
  • Braille Utilities and others

On April 15th, in a well advertised function in Chennai, Dayanidhi Maran launched a software pack to be distributed for free to people, containing a host of Tamil fonts and software. Public were not allowed into the function for "safety considerations". The only particpants were reporters from media - both print and electronic. There were glorious tributes in an editorial on The Hindu.

The CD contained a motely collection of fonts, tamilized open source software, and a few proprietary software purchased from local developers.

To start with, fonts from three companies were bundled along with fonts that CDAC itself hhad produced. Where was the need to purchase fonts fron the local companies when the Indian Govt. funded CDAC had already got sufficient number of fonts in its hands? It appears that each of the three companies were paid close to Rs. 4 lakhs for their fonts. The fonts were in multiple encoding - Unicode as well as the Tamil nadu Govt. standard TAM and TAB. One of the private companies had not provided a single Unicode font. No keyboard drivers were made available to generate Tamil characters. [This apparently has been fixed subsequently, and is rumoured to have cost close to Rs. 10 lakhs, when there are free options available.] Microsoft anyway makes available indic character generation IM for a few languages for Windows XP and 2000 from its site, if one is interested in Unicode.

However the Indian Government has still not zeroed in on Unicode. Parliament websites and daily transcripts of the Parliament debates still use some fancy encoded Nagari script. Tamil Nadu Government continues to use TAM and TAB. The election commission rolls are in yet another font. For Tamil Nadu the electoral rolls are in Tamil but in PDF format with no idea in what encoding the content has been put together. It is impossible to search them. CDAC would do well to first freeze on using Unicode and only Unicode, and start with forcing every Governmental website to follow Unicode strictly. Then, they do not have to worry about distributing font packs. Unicode fonts - at least one - comes with Windows operating system. CDAC, if they want, can then offer their font pack (in Unicode). No need to invite private companies to offer their fonts and waste money on them.

Besides the font, the Tamil CD offered a bunch of open source software. Tamilized Firefox (worked on by open source volunteer Muguntharaj in Malaysia), Tamilized Open Office (CDAC had earlier worked on this, but this has subsequently been managed by Muguntharaj and Evolution at ), Tamilized Columba - a Java based email client. Poor folks at Columba seem to believe that CDAC and Dayanidhi Maran will take Columba to 3 million users by distributing the software through various avenues. I would myself suggest taking up Thunderbird, to avoid having bulky Java in the background.

Besides the open source applications, there were software programs developed by AU-KBC - a spell checker, a dictionary from Palaniappa Brothers, a Tamil OCR from LearnFun systems and a few bits and pieces such as nursery rhymes etc.

The OCR is a fantastic piece of software, unquestionably the best product in the CD that comes to you for free. It is not easy or intuitive like a typical English OCR but nevertheless it works and works well if your scan is decent. The dictionary is awful piece of software. Doesn't even allow you cut & paste facility. The spell checker from AU-KBC - a research center, part of the Madras Institute of Technology is a stand-alone software and cannot be used along with any other software. LearnFun system, for example, produces a much better Tamil dictionary which comes as a plugin (which I use by the way) and can be used along with Microsoft word or Adobe Pagemaker etc. Even this is not good enough as it cannot understand Unicode at this stage.

In all, the CD from CDAC was more of a joke than a worthwhile effort. April 15, the Tamil new years day, and the accompanying political mileage - the CD had on its cover pictures of Sonia Gandhi, DMK's Karunanidhi, Manmohan Singh and Dayanidhi Maran - was the only reason why a half baked product was released.

To this day, after one month, nobody in the public have gotten hold of the software CD. Those qho requested the CD from CDAC are still waiting for the post. (I have a copy of the CD and make further copies for anyone who is interested.)


Now, on to the discussion CDAC wants for other languages. If the aim is to gain some political mileage, it is not worth our time and effort. However if CDAC is genuine, then what is required is a simple, easy to install CD for each language. There is no need at this stage of OCR, TTS, ASR and MATS! Good dictionary (English-Local Language-English at the least), Good spell checker, keyboard driver (bundle the one from Microsoft by getting their permission, it is after all free), focus on only Unicode, localise Firefox, Thunderbird and Open Office, and a good installer for Windows 98 and Windows XP.

This is what is required.

Wednesday, May 11, 2005

Sub-10k desktop PC?

From CNET Low-cost computing with style? Photo | Story

The people behind Simputer, called Encore Software have come up with the low cost desktop and mobile computing products branded Sofcomp and Mobilis respectively.

There have been plenty of stories across multiple news sites, but CNET provides detailed photographs. I am particularly interested in the desktop variation. If the news is right and the company succeeds in converting the prototype into marketable boxes, it is the desktop variant that will have a large market across India.

CNET article indicates that "The SofComp box with a cathode-ray tube monitor also will cost about 10,000 rupees." However the photograph shown in the CNET site, provided by Encore, shows an LCD monitor. So what you see may not be what you get! If it is a cathode ray tube version, it won't work under the battery. If it needs to work with the battery, it must have to be an LCD display. If a decent sized LCD display is needed, Encore will have to indicate what the price will be.

Whatever it is, I hope this doesn't fizzle out like Simputer did.

I will be watching this product with keen interest.

Monday, May 09, 2005

When Madras beat Holkar in the Ranji Trophy

From The Hindu, Madras Miscellany by S.Muthiah: `Twas a famous victory

Madras Miscellany is my favourite column. The first thing I read in my monday 'The Hindu' is this section. It was more enjoyable today as it talked about Madras winning its first Ranji Trophy 50 years back.

The scorecard of that Holkar vs Madras final (from Cricinfo).

Balu Alaganan captained Madras. In both the innings, Madras survived because of excellent tenth wicket partnerships of 65 and 92! The hero in both the cases was the last wicket M.K.Murugesh, a left arm orthodox spinner. Of course, there were other stand-out performances, particularly by AG Kripal Singh who scored 75 & 91 and also 7 wickets. But he was a genuine allrounder unlike the tail Murugesh. This makes Murugesh's contribution even better.

Murugesh had debuted only the previous season (1953-54), but was the topmost wicket taker in the final the very next season and was also the best bowler in the championship in 1954-55 picking up 23 wickets @ 19.52. He seems to have played for another 4 seasons and then vanished into oblivion. His first-class career record of 68 wickets @ 27.98 shows that his last four years were not great.

Madras/Tamil Nadu won the Ranji Trophy once again in 1987-88. But that has been it. We have reached the Ranji finals twice recently, but in both cases have been thwarted by Mumbai.

Sunday, May 08, 2005

Mobile phones at less than Rs 1,500?

The Economic Times reports: Reliance phones to come at less than Rs 1,500

Motorola announced in February 2005 that it is planning to come up with $30 handsets for markets like India. Now Reliance says it plans to work out agreements with its vendors to bring the cost of the handsets to lower than $30.

In markets like UK (and most of Western Europe) and USA, the price of the handsets is brought down by direct agreements between handset manufacturer and mobile service provider. Service provider buys handsets in bulk from the handset manufacturer, then adds his own subsidy and offers the handset at virtually throw-away prices for those customers who go for a post-paid contract with a minimum commitment of an year.

In India, this model is not available directly because of Govt. of India's policies on revenue sharing agreement with the mobile companies. As part of the revenue sharing, the mobile companies are expected to pay a percentage of the topline revenues. However as far as selling the handsets are concerned, mobile companies cannot afford to pay revenue share. It would have to be profit share. So until the Govt. can amend the rules appropriately, the mobile companies may not directly want to get involved in selling the handsets. I am still not sure what sort of deal Reliance and Tatas to with respect to their CDMA handsets.

Bringing the cost below Rs. 1,500 will result in massive growth in the mobile sector. Similar to the handsets, the price of the GSM modules should also come down and should be made easily available in India. It should cost no more than Rs. 1,000.

A GSM module is nothing but the internal circuitry of a mobile phone, available as a sort of printed circuit board device wherein a SIM card can be inserted. This can be used in creating smart devices for vehicle tracking, remote display boards etc.

When I was in Cricinfo, I worked on putting a remote managed scorecard display board powered by a GSM module. The cost of the module was too high. It cost me close to Rs. 50,000 to put a single unit together. It had an LED display. Scores could be sent to this display remotely as SMS messages. The GSM module (and the SIM card) picked the message, cut off the unwanted SMS headers and displayed the score in the LED panel.

I can think of several other applications. A one-way speaking device as a child-tracking and communication device. Using the GSM module a device can be built and stitched to the cloting of the child (or embedded safely in a pouch in the child's dress). The module is so designed that when a call is made to this device, the call is automatically picked up. There is a microphone/speaker set up which is used to communicate with the child. The child need not pick up and press any button. When the call is initiated, the child will have to merely talk to the parent/guardian who is initiating the call. This device can be made very small and weightless, by removing the keypad etc.

In Ararattai Arangam program today on Sun TV, Visu introduced a chap who seems to be using GSM modules (or probably a ripped mobile phone) to come up with several interesting products. If you are reading this blog by chance, please send an email to me! :-) I would like to discuss some ideas with you!

Saturday, May 07, 2005

Video piracy through Internet streaming

News from The Hindu: Downloading, a twist in video piracy tale

This now is a very real threat. There have been quite a few online sites providing streaming video of most of the movies without properly acquiring rights. Fighting them is difficult. Legislation has to be made at the level of the Central Govt. to arm specific agencies in India to pursue and prosecute erring websites wherever they are based.

However even this is difficult logistically. Should it be the job of the government of a particular country to go after pirates in other parts of the world? Can the government afford to spend lots of money in order to protect the revenue of a few private entities? It will be left to the concerned rightsholders to find ways of saving their own intellectual property rights.

They will have to form a body to go after the erring websites in a bit to close them down, by tracking their ISPs and complaining to the ISP as well as threatening to take legal action against the ISPs and other downstream internet providers.

In addition to this, the rightsholders should also look at exploring ways by which they can make movies available over the Internet for legal downloading at reasonable prices.

Governmental legislation at the state level is not going to help at all.

Lason takes BPO to the countryside

News from The Hindu: Lason takes BPO to the countryside

This is clearly the next wave. I have been thinking about this idea for quite a while. I am trying to do this in a small way - not for jobs from outside the country, but within the country.

There is fair bit of pre-processing work related to regional language publishing - say Tamil publishing. All of this is outsourced by the Tamil Publishers to third parties. This includes converting the handwritten manuscript into a digital text document, then typesetting this in a software to fit into the publishing standards (Demi, Crown etc.), then proof-reading this document to fix errors. In between converting the document into digital text and typesetting, the document needs to be edited.

Most (perhaps 95%) of the Tamil publishers do not bother much with editing. At the editing stage, the document may have to go back and forth between the editor and the author. Since most publishers do not bother with this, one can jump from handwritten manuscript-> digital text-> proof-reading.

Right now, for bulk of the Tamil books, the work happens in Chennai. However even with a very poor internet connection, this work can be outsourced to different villages and small towns in India. The handwritten manuscript can be pushed by post to such village centres where it gets digitised and send back as an electronic document to the publishers. The publishers in turn can print the document, generate the negatives (or positives) and offset print it wherever they desire.

I am experimenting this now. Will report on the results down the line.

Friday, May 06, 2005

Tony Blair's third term

That Tony Blair was going to be elected for the third term was well known before the elections. The conservatives, lacking a charismatic leader and a good story to take to people, gave a battered Blair another chance.

This is probably the last term for Blair. He may want to leave the post either midway or at the end of the term.

I am happy to note that Liberal Democrats have increased their seats, and hopefully the trend will continue. They have also increased their voting share significantly to about 23% of the total votes polled.

Britain is not a very important force in the world today. Yet, as sidekicks to USA they cause considerable damage to the world. Hopefully, with this verdict, Britain will stay out of American adventurism.