Jan 27, 2008

Share of average annual household consumption

Indian Household Consumption year over yearThe same furious energy that made India a world-class provider of software and business services is creating a huge urban middle class. By 2025, household spending could more than quadruple, generating the 5th-largest consumer economy on Earth, up from 12th now. About 400 million Indian city dwellers—nearly 100 million more people than the United States has today—will enjoy comfortable living standards. Even India’s most affluent consumers will outnumber not only the comparable segment in China but also the entire current population of Australia.

As a result, the composition of spending has already started to change: discretionary outlays (such as mobile phones) occupy more of India’s shopping basket, even as the absolute sums devoted to necessities, such as food, continue to rise. Above all, consumers will increase the amounts they spend to improve their economic prospects and quality of life—for better health, education, transport, and communications.

This shift has begun at lower income levels than it did elsewhere, so multinationals that compete in the country must keep costs low enough to avoid being squeezed between the desire of so many Indians for a middle-class lifestyle and the realities of their limited budgets.

Jan 22, 2008

Worli Nariman point Sea Link will now include a Tunnel

Part of the Worli Nariman Point sea link may now be a tunnel. It is suggested that an underground tunnel from Priyadarshini Park in Malabar ill to Marine Drive would be cheaper than trying to complete Bandra-Worli-Nariman Point sea link.

Rising cost and delays caused mainly due to squabbles over money have already sent the cost of this 5.6 km long sea link -- which is the first phase of the plan -- from Rs 300 crore to Rs 1500 crore. The sea link from Malabar Hill to Marine Drive is expected to cost Rs. 1400 crore. A tunnel can be had in Rs. 700 crore. This means that the sea link could be extended to end at Haji Ali.

Building tunnel might be quicker and more cost effective than trying to complete the sea link project, but it will still take a number of environmental clearances and feasibility studies.

Jan 19, 2008

Meera Mini Car -- Before there was TATA Nano

Meera Mini Car India

Ratan Tata’s dream of making a people’s car (Tata Nano) may have come closer to reality. But for the third generation of the Kulkarni family in Ichalkaranji near Kolhapur, the Nano has revived memories of their late grandfather Shankarrao Kulkarni, who also came close to fulfiling a similar dream fifty years ago.

Shankarrao, like Mr Tata, dreamt of making a small car for the masses, which he wanted to make available at Rs 12,000 in 1975. He created the prototype of his small car in 1949 and then went on to create five more improvised models over the next two decades, says Mr Kulkarni’s grandson, Hemant Kulkarni, who currently looks after engineering company Kulco.

The last model, developed in 1970, was a fully working model of his dream mini car and was much smaller than the Nano, says Hemant. “My grandfather had a keen interest in automobiles and had developed the small car which he named Meera,” he said. “This car has many similarities with the Nano: both have a rear engine, single wiper, five-seater capacity, and similar mileage at 18-20 km per litre,” he added.

Although Shankarrao studied only till standard 7, he was well-known in Ichalkaranji for his expertise in engineering. “He was working with the Kirloskars under the late Shantanurao Kirloskar and had a team of 10-15 people who worked on different parts of the car. All components of the car, including the engine were made locally and some parts like the tyres were sourced from the market,” said Hemant.

The press components were made in a factory at Bhoglewadi, rubber suspensions were sourced from the Swastik Rubber factory in Pune; Tyres were bought from Ceat, the electric components were from Lucas, while the glass products came from Ogale Glassworks. He had an engineering workshop where the first two-seater model took shape. It was passed by the RTO and was given the registration number MHK1906. Meera then went through a lot of improvisation over the next twenty years and the sixth model, which was registered as MHE192, was the final model, Hemant explained. Mr. Kulkarni had introduced rubber suspension, adjustable ground clearance, three doors and tilting wheels in a four-wheeler, for the first time in India.

Work on the small car was started in 1945 and the first model — a two seater — was out in 1949. He made a three seater car in 1951 and started working on the fourth model from 1960. In an interview to a local newspaper, Mr Kulkarni had said that rubber suspension reduces the need for “over 100 spare parts and also ensures that when you cross a stone, the shock is not transferred to the other wheel as is done by the shaft.

“It also increases the life of the wheel. The ground clearance of the car can be kept from 6 to 11 inches. It should be increased when travelling on a rugged road and reduced when travelling in speed on a smooth road,” Mr Kulkarni had added. While the small car now runs on petrol and gives an average of 20 km per litre, Mr Kulkarni had said he could make a commercial model that would run on diesel and give a mileage of 25 kms to a litre. According to the interview, Mr Kulkarni had made arrangements for starting commercial production and had also tied up with companies to make spare parts available.

According to Mr Kulkarni’s grandson, red tape and bureaucracy were responsible for the failure of what would have been India’s first small car. “Mr Shankarrao Kulkarni wanted to start commercial production, but needed government approvals as it was controlled by the government. He took the car to Mumbai where it was exhibited at the Gateway of India. He drove the car to Mumbai, crossing the Khandala Ghat which was much steeper than it is today,” said Hemant.

The Jaysinghpur municipality in the state had offered to put up a plant for manufacturing the car and had also offered him land free. Mr Kulkarni had approached the central government, but by 1975, Suzuki had also planned to come in India and Mr Kulkarni’s proposals were rejected. He had spent more than Rs 50 lakh on the car at the development stage and later could not pursue the matters with the government. “So our efforts started declining and eventually the project died out. He had made, five more cars, but they were not permitted on the road as the excise duty hadn’t been paid,” said Hemant. “He had his limitations and could not pay it,” he added.

In the fifties, Shankarrao and the Meera were a familiar sight in Ichalkaranji. The car was also used by many eminent personalities like Shankarrao Chavan, Rajarambapu Patil, Mohan Dhariya and Shantanurao Kirloskar, said Hemant. It also attracted a lot of attraction at the Belgaon engineering exhibition, according to another news item published in a regional newspaper then.

The Kulkarnis are now happy that their grandfather’s dream is being realised. The family plans to pay homage to Shankarrao on his birth centenary on January 26. “We are touched that his dream has finally seen the light of the day, on his birth centenary and we are extremely happy that a big group like Tata Motors has a role in this. Our only wish is that we turn out to the first buyers of Tata Nano,” said Mr Kulkarni with deep emotions.

Jan 18, 2008

Anil Ambani's Daily Morning Run

Anil Ambani Running Mumbai

It is 15 minutes to six in the morning. A faint smog glows in the yellow street lights of the Marine Drive. Some men are warming up near the NCPA. Occasionally, they look towards a deserted traffic junction. They are waiting for Anil Ambani.

At about half past six, a Land Rover arrives in a rush. Photographers rush to the car. Ambani emerges in running gear and walks hastily towards the waiting men. The word “sir” that repeatedly punctuates their friendly banter fills the winter air. Suddenly, the number of runners swells to about 20. Ambani, though shifty and constantly walking in large circles, is clearly at the centre of the crowd.

He throws quick instructions while doing a momentary spot jog, and plans the route. They will go for a short run as the marathon is just three days away. They will run down the Marine Drive, up to the steel benches on the incline of Malabar Hill, and run back. Just 10 km. “Run slow,” a man tells Ambani, “we have to keep up with you.”

This is a small group of stock brokers, industrialists, fund managers, a canteen boy, a student, a police inspector with the CID and a lady gynaecologist that has found immense pleasure in training for the 21-km half marathon with Ambani. Between them is the fellowship of long distance runners. They all run to “burn the bugs in their mind,” one of them says.

Ambani has been an inspirational figure on the Marine Drive. Many businessmen have started running after seeing him. Sanjay Kapadia, a 47-year-old stock broker who formed the core group that trains with Ambani, says that sometimes a few men arrive on the Marine Drive disguised as runners just to get familiar with one of the richest men in the world. There have been times when Gujarati women have arrived in droves to take pictures. “One woman even brought her 18-year-old daughter for a picture with him,” says Kapadia. But these are odd events. Usually, the dawn assembly is preoccupied only with running. Almost all acquaintances here have been fostered through running and no one here talks business with Ambani.

Sanjay Kapadia formed the group because he needed company while running long distances. So, for the last four years, he recruited people he came across during his daily dash at the racecourse or on the Marine Drive. One of them just happened to be Anil Ambani.

“I pulled people along wherever I went,” says Kapadia grinning. After running the Mumbai Marathon in 2006, Kapadia injured his spine and had to undergo an operation. His surgeon, Dr Abhay Nene, also a marathoner, performed the operation free of cost as a tribute to their common passion. Though Kapadia was disappointed at missing out on the marathon last year, he drove his car along the marathon route and offered tired runners bananas, water and energy drinks. Now he is back on his feet and raring to run the half marathon.

He’s had plenty of practice. On Sundays, the clique runs 10 to 25 km on the road. Some members find this tough. Some want more, like Sanjay Dalal, son of cookbook writer Tarla Dalal. He runs marathons across the world in cities like New York, Venice, Prague and Cape Town. “While the Mumbai Marathon is only 42 km, in Cape Town, it’s a 56 km run along hilly terrain,” he says.

The runners say they’re greatly inspired by Savio D’Souza, Mumbai’s first international marathon winner and 62-year-old Dr Rodhan Shroff, who constantly pushes the group to run greater distances.

“Running has changed my life,” Kapadia says emphatically. And so have the friends he’s made along the journey. When his mother had a heart attack and was admitted to Harkisandas Hospital, one of the doctors, Gaurang Shah, a runner himself, instantly recognised Kapadia. “He (the doctor) visited my mum every single day in the hospital,” says Kapadia.

Their run that morning is coming to an end. Ambani accelerates as he reaches the finish line. People on the parapet clap. A man runs with him and screams, “Your average is 10.6 km an hour, sir.” Ambani slows down into a hurried walk. He chats with the gang, makes fun of some of them, and accepts some jibes. He then runs to the Land Rover and takes the wheel. The Rover leaves in a flash. And one by one, everybody goes home.

Jan 13, 2008

Apparel Shopping in Mumbai

Shopping Mumbai India Wedding Collection FemaleMcKinsey reports that Indians devote about the same share of their income to apparel as Chinese and Brazilians. However, India's lower per capita income means in real dollar terms the spending in much less than other countries.

40% of mass market Indian shoppers said that the most important shopping occasions revolved around special events such as weddings and annual religious festivals. Also, this means that shopping is more of a family activity in India than anywhere else. Nearly 70% of shoppers always go to stores as a family. This is consistent across age groups, income segments, regions, and city sizes.

India women are primary decision makers in apparel purchases for the entire family. Husbands decide the stores the family frequents.

In India the market for apparel for men is larger than those for women.

Jan 12, 2008

Tata Nano. $2.5K car

Tata has unveiled its 1-Lakh Car at the 2008 Delhi Motor Show, and its officially been christened the Tata Nano. The model at the motor show was powered by a 33 horsepower 624cc two-cylinder gasoline engine mated to either a stepless CVT transmission or 4-speed manual transmission. A diesel version will soon follow. The car will initially available with the manual, with the CVT to be available later.

The 4-seater Tata Nano uses 5 liters of fuel per 100km and meets all Indian local crash test and emissions guidelines. It was also designed to pass international side offset and side crash tests as well as Euro 4 emissions tests. It has a length of 3.1 metres, width of 1.5 metres and height of 1.6 metres.

The two-cylinder engine, which uses Bosch’s Value Motronic fuel injection and engine management is mounted at the rear of the car together with the battery. There is a small boot at the front where a person would normally expect the engine bay to be.

The car has no power steering, but being so light I don’t think you’d really need one anyway, plus at its 1 Lakh price point you really can’t complain. It also lacks an RPM meter, with its instrument panel consisting of only a speedometer, a fuel gauge and an oil light. The car will be priced at 100,000 Indian rupees, or 1 Lakh, but customers will pay slightly more than 1 Lakh at the dealers because of taxes and other charges.

This 1 Lakh price tag is for the standard car, which does not have air conditioning. The two deluxe models will cost more. 1 Lakh Indian Rupees is roughly RM8,350.

Tata expects to sell 500,000 units of the Tata Nano, and the car will go on sale in the second half of 2008.

Jan 5, 2008

Mumbai Residential Development Projects of 2008

Five new residential projects have started in Mumbai this year.

1. Redevelopment of south Mumbai's old buildings will involve tearing down of south Mumbai's old buildings. The state government has inked an agreement with lok Housing to redevelop 2000 decrepit buildings in a joint venture with MHADA. Buildings considered dangerous will have mandatory eviction of the tenants and entire clusters will be redeveloped. This project will create new housing stocks for additional private tenants in the prime South Mumbai location.

2. Kilburn Engineering Project, Bhandup. The entire stretch of Lal Bahadur Shashtri Marg from Kanjurmarg to Mulund is undergoing the transformation. Housing development and Infrastructure limited (HDIL) has acquired 8.32 acres of property belonging to Kilburn Engineering. Hundreds of premium flats are likely to be available in the market over the next 12 months.

3. Dharavi Redevelopment project. The Rs. 90,000 crore project will transform the face of Asia's largest slum and develop massive 70 mllion sq feet of built-up space. This project has a huge political backing as well.

4. Mass-Housing in Panvel. Investment firm Eredene Capital in association with Matheran Realty is set to build 1,85,000 low income residential units at a site in Panvel.

5. Hiranandani Township in Panvel. This is a new residential township in Panvel spread across an area of 280 acres. The built up area of the residential township will be 18.3 million sq feet. The plan includes a mix of flats, town homes and villas. Large open spaces with parks and pedestrian corridors to offer premium lifestyle is planned.

Bandra-Worli Sealink Progress

A six kilometre road from Bandra Reclamation to Worli Sea face that will reduce travel time by as much as an hour is sparking yet another controversy.

Its already three decades late but was finally slated for completion in May 2008. But once again the battle over costs is getting the Rs 1,300 crore project off track.

Ajit Gulabchand, Chairman of HCC, the contractor for the project says that the company has stopped buying materials to restart work post monsoon because the Maharashtra State Road Development Corporation or MSRDC is shirking payments.

"Ask the MSRDC or the state government about whats happening with the project. We have told them that they owe us Rs 284 crore for features that they ask us to add to the project. We have already taken on losses and written them off. The project is not stalled by us, but we have stopped procurement for the work that is supposed to begin in October post monsoon," said Ajit Gulabchand, Chairman, HCC.

The MSRDC has a different story to tell. The MSRDC alleges that HCC has stalled the project instead of taking it the appropriate forum. They also say that HCC has inflated the cost of the project for which MSRDC is not liable.

"We believe that they owe us Rs 284 crore, if they don't accept that then lets take it to an arbitration panel that will decide. But the MSRDC is not making any moves," added Gulabchand.

There's now no chance of the project being completed even by May 2008. Ajit Gulabchand says that the earliest would be December next year and that’s only if arbitration takes place. The only people really losing out are the citizens of Mumbai, who battle frustratingly heavy traffic and delayed journeys, with no visible respite even in the next year.


The project is now likely to be done only by January 2009. New, 13 Km sealink between Bandra and Versova is being planned. Worli to Haaji Ali sealink is being planned as well. This will be 4.5 km in length costing about Rs. 750 crores.

Here's the Video on this project.