Wednesday, June 29, 2005

Tamil Nadu to approach Supreme Court on Entrance Test mess

Heard in the afternoon news that Tamil Nadu Government has approached the Supreme Court against the Chennai High Court order striking down the TN Govt. order on cancellation of the entrance exam for professional courses. Students have also approached the Supreme Court, to request them not to grant TN Govt. stay of the High Court order.

This would mean a minimum of 10-15 days delay to the admission process.

Tamil Nadu Govt. move is unacceptable.

TN Govt. may be borrowing some time, as I suspect they are planning to frame an ordinance with retrospective effect to cancel the Entrance exams. There could be political moves to force the Governor's hand in signing it etc.

Poor students!

Tuesday, June 28, 2005

Court strikes down order on Tamil Nadu entrance test

News from The Hindu: Court strikes down order on entrance test

This was expected. I don't think Jayalalitha was really serious in cancelling the entrance tests after conducting the tests. She didn't want to give political space to PMK and DMK.

After a bunch of aggrieved students went to court, DMK leader Karunanidhi, while welcoming the scrapping of the entrance exam, criticised Jayalalitha that the timing of the move was wrong. PMK's Ramadoss questioned Karunanidhi. Karunanidhi was quick to say that his views were the same as Ramadoss'. (How?)

It is speculated that the TN govt. may look at going to Supreme Court against this verdict. But that will unduly affect the students. Admissions to Arts & Sciences colleges across the state are over by now.

In the meantime, Ramadoss and PMK are on their feet attacking Jayalalitha again. That instead of merely bringing a Government Order, the Govt. should have promulgated an Ordinance! This is madness. A court will be well within its right to dismiss an Ordinance as well, since the Bench has remarked thus:
"In our opinion, if the State Government wanted to depart from the selection method laid down in the Regulations, it was incumbent on it to pass an Act or Ordinance and get the assent from the President. That has not been done. Even if that had been done, it is doubtful whether it would have been a valid law, since it would still be in violation of Article 14 of the Constitution. The GO is not a law which has received the assent of the President. (emphasis mine)
Therefore it is clear that an Ordinance may still not escape the judicial review. Ramadoss would do better to consult some lawyers on what the process should be to achieve his goals.

The self-financing engineering colleges themselves were asking for removal of the entrance exam. Now they will have to either quickly conduct an exam of their own, or accept the marks obtained by the students in the exam conducted by the Government.

Tamil nadu Engineering colleges have close to 80,000 seats and it appears that the demand is less than the supply in engineering. However, when it comes to Medical, the demand is heavy. The number of seats are less than 4,000. It is quite possible in future to have more than 4,000 students, all having 200/200 in Physics, Chemistry and Biology all wanting to get into the Medical Colleges in the state.

Therefore, even if an entrance exam is not needed for the engineering courses, it will be needed for the medical colleges. Further, Medical Council of India "had made it clear that in States having more than one medical college or one university board or examining body an entrance examination was mandatory." The bench has also observed that "Constitution Bench of the Supreme Court [has stated that] all the MCI Regulations were mandatory and not directive."

Thus, the best the Tamil Nadu Government can do is delink medical and engineering entrance exams for the next year, scrap the engineering entrance exam and allow the medical entrance exam to continue.

Monday, June 20, 2005

Reforming the IIT JEE system

From The Hindu: Reforming the Joint Entrance Examination system

S.S.Vasan, Rhodes Scholar, Trinity College, Oxford, England writes about the need to reform JEE. He provides two suggestions. The key one is
The first possibility is to aim for convergence between the AIEEE examination and the JEE screening test. According to Banerjee, "[The idea of a] national test [administered by] an organisation like the ETS, which will function as an ancillary of the IITs, has been on the cards for years." A single test will reduce the burden of students drastically. Those who score very well in this test can be asked to take a second test for gaining admission into the IITs and the NITs. This two-stage procedure would be similar to the current JEE format of a screening test followed by the main examination. The combined strength of the IITs and the NITs should increase the acceptance rate to 10-15 per cent, making it comparable with the rest of the world. Similarly, deemed universities and private colleges may be encouraged to accept BITSAT or AIEEE scores instead of conducting their own entrance examinations.
The idea of an ETS like entity having one exam for admissions to all Engineering Colleges is perfect. Rather than organizing a "second stage" exam, conduct an advanced exam on the subjects almost simultaneously.

This is like the GRE General and GRE Subjects exams model. Not all colleges may require the second, advanced exams on the subjects. So it is up to the students to determine what exams they want to write. There is another suggestion by Vasan, which is not very appealing to me.

I would also suggest that AICTE suggest to various states that there is no need to conduct statewide entrance examinations as well. There will be a single exam - two levels, and the scores obtained in these exams will be sufficient, along with a few other criteria, to select candidates for various Engineering colleges - be they IITs, NITs, Government run colleges or private self-funded colleges.

The equivalent of ETS - at least for engineering - can be set up by IIT, AICTE and few other particpating institutions together. This can be extended to medical and other life sciences course by involving AIIMS.

[Post on IIT JEE results]

Friday, June 17, 2005

Indian software and services exports

A NASSCOM press release states that the software and services export revenue has grown by 34.5% this financial year. The highlights are:
  • Total Indian IT and ITES revenue = USD 22 billion, a growth of 32%
  • IT and ITES export = USD 17.2 billion a growth of 34.5%
  • Domestic IT and ITES revenue = USD 4.8 billion, a growth of 24%
  • IT export (without call centre and other ITES export revenue) = USD 12 billion, a growth of 30.5%
  • ITES export = USD 5.2 billion, a growth of 44.5%
  • Projected export growth for the current financial year = 30-32%, which means we are targeting IT and ITES export revenue to touch USD 22.5 billion.
Even if the domestic IT and ITES growth rate remains the same 24%, the projected IT and ITES revenue for 2005-06 will be USD 28.5 billion.

An overall growth rate of 30-32% is not good enough! India should b e targeting at a growth rate of 50% or more. Probably 70% if we are looking at doubling the IT sector revenue in the next 2-3 years to reach USD 50 billion. The leading companies will have to think very differently than adding another 10,000 new employees each year. Put all the idle money in the hands to acquire good, small time product companies abroad. Look at considerable value-additions to the existing customers in the process. Any acquisitions this year will probably bear fruit only two years down the line.

NASSCOM has also announced the top 20 software exporters based out of India. The list excludes companies which are incorporated in another country but having operations in India, but includes subsidiaries of foreign companies incorporated in India. Thus Cognizant, Syntel, Covansys, Intelligroup are out, IBM Global Services India, Perot Systems India, Siemens Information Systems India are in. The top 10 are:

No.CompanyRs CroreUSD mn
1Tata Consultancy Services Ltd74491644
2Infosys Technologies Ltd.68061502
3Wipro Technologies54261198
4Satyam Computer Services Ltd3377745
5HCL Technologies Ltd2664588
6IBM Global Services India Pvt. Ltd.1867412
7Patni Computer Systems Ltd.1548342
8i-flex Solutions Ltd1110245
9Mahindra British Telecom Ltd.913202
10Polaris Software Lab Ltd913202

Infosys has projected a revenue increase of at least 33% for FY 2005-06. I guess other leading companies project a similar rate. This is why NASSCOM has projected an overall increase of 30-32%, conservatively.

IIT JEE results

From The Times of India Allahabad boy tops IIT, second spot for AP lad

I couldn't find the link online to a brief news item which appeared in The Hindu. But the story on The Hindu states that of the 1,80,000+ students who took part in the IIT JEE, about 4,500 have secured more than the cut-off. The report further states that this year the exams were made easier based on a request from the Government to enable students from the Government schools to do better(!). The result of this was the cut-off marks going up.

It is confusing to me how making the exams somewhat easier helps students from Government schools. The cut-off goes up and in any case only 4,500 people or so end up over the cut-off. The cut-off is a moving point and aims to allow only those many students as many vacancies.

Wednesday, June 15, 2005

The choking of innovation

From Businessworld (registration required) The choking of innovation By Sanjay Anandaram, JumpStartup Fund Advisors

Interesting article and very relevant. There was one paragraph that caught my attention.
It is disheartening from an industry standpoint to see hundreds of millions of dollars simply lying on the balance sheet and not being invested in creating innovative competitive advantages for the future. It is disheartening to see companies lack the confidence to take big, bold steps, even after 20 successful years in the global arena. The ability to dream big on a global level and then take the required steps to realise the dreams is what will distinguish the true global players from the also-rans in the next 10 years.
Everytime I see the Infosys Balance Sheet, this is exactly what comes to my mind. Each year, they add another Rs. 1,000 crores to their reserves. Or capitalise the reserves by issuing bonus shares. All this money is lying idle!

They now talk of returning some of this excess money to the shareholders (through special dividends). It is sickening. Why aren't they taking a bold measure and invest Rs. 1,000 crores into promoting several innovative ventures in the IT sector? Why can't they diversify into IT hardware or at least fund such projects even if they do not want to manage such a show?

As it is, Infosys has been returning decent money to shareholders by way of dividend. There is no reason to pay out more. What this country needs is hardcore investment in R&D or innovative, earth-shaking ventures.

Sunday, June 12, 2005

Six Indian firms in BW's Infotech 100

The Economic Times: Six Indian firms in BW's Infotech 100

The complete list and some notes from Business Week (pdf)

Five IT companies and a telecom company in the top 100 companies list based on a bunch of criteria.
  • TCS
  • Infosys
  • Wipro
  • Satyam
  • Cognizant
  • Bharti Teleservices
From an Indian perspective, the first three TCS, Infosys, Wipro are looking towards becoming global IT consulting companies from mere body shops and IT outsourcing companies. How seriously they will be viewed as consulting companies has to be seen.

Bharti is best placed for continuous growth, straddling all forms of telecommunication and Internet services in India. Reliance Infocomm is the only serious competition, but its management mess will continue for a while. Tatas are too far behind in all their Telecom ventures and cannot be a serious competition to Bharti. I expect Bharti to easily sail into US$10 billion annual revenues ahead of the other five listed above. Currently TCS is a little over $2 billion in revenues. Infosys will cross $2 billion in the next financial year. Bharti may also do the same. Wipro could as well.

Satyam, Cognizant and a host of other second rung IT firms will not try anything outlandish. Will just keep plodding through to accumulate more revenues in the IT and ITES sector.

Someone should come up with a list of India's new economy companies and analyse their growth prospects, and also look at spotting new growth sectors.

Friday, June 10, 2005

The quality of reporting in Business newspapers

Financial Express says: VSNL FY05 net more than doubles to Rs 756 crore

The news is similar in almost all the other business channels.

I was quite surprised to see VSNL posting such significant gains, since I couldn't see where the growth could have come. International calling, VSNL's key revenue generator has been flat. The falling rates are compensated by rising volumes, and in the end the growth is minimal, if at all.

Then, how can VSNL double its profit? Surely there can't be so much of cost cutting possible despite the VRS implemented previous year?

Read through the quarterly accounts (pdf file) and you will notice that the increase in annual profits is related to one exceptional item - for Rs. 468.7 crores, arising from sale of assets of Intelsat, in which VSNL had a little over 5% stakes. Though this is clearly mentioned in the quarterly/annual result, none of the news agencies thought it necessary to mention this.

It is difficult for me to evaluate what the net profit would have been by removing the extraordinary item, since there would be an impact on the taxation as well. My guess is that without the extraordinary items, the profit would be almost on par - that is very close to Rs. 370 crores. May be a bit less, maybe a bit more.

By not reporting this clearly, the business newspapers and online sites are doing a disservice to their readers.

Monday, June 06, 2005

Fifth anniversary of dotcom bubble bust

Business World feature on dotcom bubble bust. They have talked to five people involved in the dotcom up and down: We should have... we shouldn't have... (Free, but registration required)

Of the names talked about there, Rajesh Jain and BG Mahesh have built portals. Rajesh sold it, Mahesh, I think, is still involved in Poster boy Lulla cannot truly be called an Internet entrepreneur. was a Microland venture. Pradeep Kar was the brain. Lulla was the bait for Murdoch? I have no idea how popular or useful Indiaparenting was, or what they achieved, or are achieving now.

There are hundreds of entrepreneurs still out there building interesting ventures in the Internet sector, but the opportunity in pure Internet content creation and monetising that is zero for now.