Cyrus Mistry named Ratan Tata's chairman

Tata Sons, the holding company of over $80 billion conglomerate Tata Group, on Wednesday announced that Cyrus P Mistry, the 43-year-old managing director of Shapoorji Pallonji Group, will succeed Ratan Tata. "The Board of Directors of Tata Sons at its meeting today appointed Cyrus P 

Mistry as the deputy chairman. He will work with Ratan N Tata over the next year and take over from him when Tata retires in December 2012," Tata Sons said in a statement.

This is as per the unanimous recommendation of the selection committee, it added.

Shapoorji Pallonji Group holds 18% stake in Tata Sons.

Commenting on the appointment, Ratan Tata, chairman of Tata Sons, said: "The appointment of Cyrus P Mistry as deputy chairman of Tata Sons is a good and far-sighted choice.

"He has been on the Board of Tata Sons since August 2006 and I have been impressed with the quality and calibre of his participation, his astute observations and his humility."

Tata further said: "I will be committed to working with him over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the Group on my retirement."

Mistry has been a director of Tata Sons since August 2006. A graduate in civil engineering from Imperial College, London, he also holds a management degree from the London Business School.

Infosys first non-Indian CEO

         IT bellwether Infosys Technologies could have its first non-founder and non-Indian CEO in the next 2-3 years, according to a BNP Paribas report titled "Don't fix it if it ain't broken". The report speculates that Steve Pratt , present CEO of Infosys Consulting , could step into that role. This will break tradition at Infosys where the COO has always gone on to become CEO.

The current chairman N R Narayana Murthy is due to retire in August. It has been speculated that CEO S Gopalakrishnan may step into that role, while COO and co-founder S D Shibulal will take over as CEO from Gopalakrishnan. The BNP Paribas report says such a transition is a possibility.

However, the report adds that 56-year-old Shibulal might play a transitionary role for the eventual handover of the CEO role to the company's first non-founder CEO two years later. The BNP Paribas views are that of an analyst and not part of any management briefing. Analysts have spent considerable time making predictions on Infosys's internal rejig that is in the offing.

On being asked about the possibility of a non-Indian like Pratt taking over as the CEO, T V Mohandas Pai, the head of HR at Infosys, said the company would not like to comment on unsubstantiated speculations. On the issue of Shibulal taking over as CEO from Gopalakrishnan, Pai said this decision was left to the board, and the board has not made a decision on this as yet.

The report says the transition is in line with Infosys's plans to incorporate managerial and operational changes as part of its long-term growth strategy. However, the report said these changes would be different from recent internal reorganizations undertaken by some of Infosys's peers.

In 2008, TCS made changes when industry-wide revenue opportunities were weak, while in 2011, Wipro made structural shifts because of the company's underperformance vis-a-vis peers. In this case, the business environment is currently positive and therefore the changes will not be urgent or involve a company-wide restructuring, said the report.      

  

Highlights of the Budget 2011/12

GROWTH, INFLATION EXPECTATIONS

* Economy expected to grow at 9 percent in 2012, plus or minus 0.25 percent

* Inflation seen lower in the financial year 2011-12

SPENDING

* Plan expenditure seen at 4.41 trillion rupees in 2011-12, up 18.3 percent

REVENUE

* Gross tax receipts seen at 9.32 trillion rupees in 2011-12

* Non-tax revenue seen at 1.25 trillion rupees in 2011-12

DISINVESTMENT

* Disinvestment in 2011-12 seen at 400 billion rupees

POLICY REFORMS

* To create infrastructure debt funds

* To boost infrastructure development with tax-free bonds of 300 billion rupees

* Food security bill to be introduced this year

* To permit Securities and Exchange Board of India (SEBI) registered mutual funds to access subscriptions from foreign investments

* Raised foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure by $20 billion

* Public debt bill to be introduced in parliament soon

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SECTOR SPENDING

* To allocate more than 1.64 trillion rupees to defence sector in 2011-12

* Corpus of rural infrastructure development fund raised to 180 billion rupees in 2011-12

* To provide 201.5 billion rupees capital infusion in state-run banks in 2011-12

* To allocate 520.5 billion rupees for the education sector

* To raise health sector allocation to 267.6 billion rupees

AGRICULTURE

* Removal of supply bottlenecks in the food sector will be in focus in 2011-12

* To raise target of credit flow to agriculture sector to 4.75 trillion rupees

* Gives 3 percent interest subsidy to farmers in 2011-12

* Cold storage chains to be given infrastructure status

* Capitalisation of National Bank for Agriculture and Rural Development (NABARD) of 30 billion rupees in a phased manner

* To provide 3 billion rupees for 60,000 hectares under palm oil plantation

* Actively considering new fertiliser policy for urea

FINANCE MINISTER ON THE STATE OF THE ECONOMY

* "Fiscal consolidation has been impressive. This year has also seen significant progress in those critical institutional reforms that will pave the way for double digit growth in the near future."

* Food inflation remains a concern

* Current account deficit situation poses some concern

* Must ensure that private investment is sustained

* "The economy has shown remarkable resilience."

FINANCE MINISTER ON GOVERNANCE

* "Certain events in the past few months may have created an impression of drift in governance and a gap in public accountability ... such an impression is misplaced."

* Corruption is a problem, must fight it collectively

Finance Minister Pranab Mukherjee on Monday proposed to raise the income tax exemption limit for general tax payers to Rs 1.80 lakh per annum from Rs 1.60 lakh at present and introduced a high new tax slab for senior citizens of 80 years and above.
Unveiling the Budget proposals for 2011-12 in the Lok Sabha, he also proposed to reduce the age limit for consideration as senior citizens from 65 years to 60.
Senior citizens will get tax exemption for income up to Rs 2.5 lakh, higher from Rs 2.4 lakh now.
As per the announcement, the increase in the income tax exemption limit for general tax payers (excluding women and senior citizens) to Rs 1.8 lakh per annum would translate into a benefit of Rs 2,000 for all tax payers.
At present, the general tax payers earning more than Rs 1.6 lakhs per annum are required to pay income tax.
Introducing a new tax slab for very senior citizens (80 years and above), Mukherjee said, they will not have to pay any tax for annual income up to Rs 5 lakh. 


Goods and services tax bill in budget session: Pranab
Higher tax exemption limit for individuals, significant benefits for senior citizens, retention of service tax at 10 per cent and withdrawal of some duty exemptions were some of the major tax-related highlights of the Budget 2011-12 presented by Finance Minister Pranab Mukherjee on Monday.

Here are some major announcements:

*Tax exemption limit raised to Rs 1.8 lakh, from Rs 1.60 lakh for individual tax papers.

*For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs 2.50 lakh.

*Citizens over 80 years to have exemption limit of Rs 5 lakh.

*Surcharge for companies cut to 5 per cent, from 7.5 per cent.

* A new revised income tax return form 'Sugam' to be introduced for small tax papers.

*Service tax retained at 10 per cent; duty exemptions to be withdrawn on various items.

*Net loss from direct tax proposals estimated at Rs 11,500 crore for the year.

*Excise and customs duty proposals to result in the net gain of Rs 7,300 crore.

*Standard rate of central exercise duty maintained at 10 per cent; No change in CENVAT rates.

*Nominal one per cent central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted.

*Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.

*Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.

*Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.

*Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be ten per cent flat. 

PM announced JPC on 2G spectrum scam

 Prime Minister Manmohan Singh announced the formation of a Joint Parliamentary Committee (JPC) to investigate the multi-crore 2G spectrum scam while addressing the Lok Sabha on Tuesday. Bowing to sustained pressure applied by the Opposition parties led by the Bharatiya Janata Party (BJP) on the 2G scam issue, Singh made the announcement for setting up the JPC so that the crucial Budget Session is not disrupted.

"The winter session was lost and the country cannot afford to lose another session. Our Government is committed to root out corruption. The Government is fully cooperating with the investigations into the 2G scam. The Government also agrees to setting up of JPC," said Singh while admitting that Government failed to convince the Opposition otherwise.

"The Government agreed for a JPC as the country can ill afford disruption of the crucial Budget Session," he added.

Requesting Speaker Meira Kumar to proceed with the formation of the JPC, the Prime Minister said that a formal motion will be moved soon. However, the terms of reference of the JPC are yet to be decided. The motion for the formation of the JPC will be moved in the Lok Sabha on February 24 by Telecom Minister Kapil Sibal.

Leader of Opposition Sushma Swaraj thanked the Prime Minister for announcing the formation of a JPC to investigate the 2G spectrum scam and called it a victory of democracy.

"I thank the Prime Minister and welcome the JPC. This is victory of democracy. This is not a victory of the Opposition or the defeat of the Government," Sushma said.

However, the terms of reference of the JPC are yet to be decided. The motion for the formation of the JPC will be moved in the Lok Sabha on February 24.

Congress sources say the JPC should also investigate the telecom policy and licences issued during the BJP-led National Democratic Alliance government. They claim that most of Opposition parties barring the BJP are in favour of this proposal.

Giving in to the opposition pressure, the government on Tuesday announced the setting up of a Joint Parliamentary Committee (JPC) to probe alleged irregularities into the allotment of 2G spectrum.

On the second day of the budget session, Prime Minister Manmohan Singh asked Lok Sabha Speaker Meira Kumar to start the process to establish the panel - a common demand of opposition parties.

'The government agrees to setting up of a JPC,' Manmohan Singh told the Lok Sabha, announcing the panel to investigate the alleged irregularities in the allocation of 2G spectrum to telecom firms by former communications minister A. Raja who is now in CBI custody. 

This is victory of democracy: BJP on JPC

The prime minister said the winter session was lost due to protests by the opposition and the country couldn't afford to lose another parliament session. The issue had caused a long parliament logjam, washing away the entire winter session last December.

'Our government is committed to root out corruption. The government is fully cooperating with the investigations into the 2G scam,' Manmohan Singh said.

He referred to the investigation by Central Bureau of Investigation (CBI) under supervision of the Supreme Court, parliament's Public Accounts Committee, and report of independent inquiry committee.

'Our government believed that as all effective steps are being taken we might have been able to persuade opposition to drop the demand for a JPC. We could not succeed in spite of sincere efforts,' admitted Manmohan Singh, adding, 'It is in this special circumstance, that our government agrees to setting up of JPC.'

He said that as a 'functioning democracy', India must strive to resolve differences in spirit of accommodation, not confrontation.

'I am therefore requesting the honourable speaker to proceed with the formation of JPC. The formal motion will be moved soon,' said Manmohan Singh.

The significant announcement comes as the opposition led by the Bharatiya Janata Party (BJP) had put tremendous pressure on the government to get the scam investigated by parliament. The panel has the powers to even call for questioning cabinet ministers and the prime minister.

Manmohan Singh said that the process to form the panel would be started soon.

Sources said the follow-up action on the prime minister's announcement would be made in coming days. They said a formal motion for setting up the JPC would be moved by Communications Minister Kapil Sibal after the prime minister replies to the discussion on the motion of thanks to President Pratibha Patil's Monday address to a joint sitting of parliament.

Once the motion gets a go ahead from the Lok Sabha, it will be referred to the Rajya Sabha for approval.

The BJP and other opposition parties welcomed the decision. Leader of Opposition in Lok Sabha Sushma Swaraj thanked the prime minister and called it a 'victory of democracy'.

'This is not the victory of ruling or opposition benches. This is the victory of democracy,' said Swaraj.

'It is the beauty of Indian democracy that even in the difficult circumstances, we sit down and find the way. 

This time, it took some more time.

'I would like to tell parliamentarians, let's drop the victory celebrations. We will start proceedings,' she said.

Communist Party of India (CPI) leader Gurudas Dasgupta also welcomed the decision, saying the government had only done its duty. 'It's good that good sense has prevailed upon the government. It is the PM's responsibility to see that parliament functions.' 

I am not afraid of appearing before JPC: Manmohan

The government now hopes that the budget session will be peaceful and productive as no significant business was conducted during the winter session because of the opposition's disruption of proceedings over the JPC demand.

Minister of State for External Affairs Preneet Kaur, who represents the Congress in the Lok Sabha, said: 'The government now hopes that the parliament will function smoothly. It is a significant decision and the Congress welcomes it.' 

Google vs Microsoft in new era business

When a recruiter pitched Dave Girouard a job at Google Inc seven years ago to sell technology to other companies, he had the same question many are asking today.

"Why does Google have an enterprise business? Are they serious about that?" recalls Girouard of one of the world's largest consumer Internet companies.

In a company where advertising accounted for 96 per cent of 2010 revenue, Girouard's role selling Web-based email and productivity software seems out-of-place - even as his team has swelled to more than 1,000 employees.

Google's enterprise business positions it to tap into a lucrative market long dominated by Microsoft Corp and represents one way to diversify revenue. But with the giant Internet search company facing a big threat from Facebook in social networking and from Apple Inc in the mobile market, some question whether Google's battle with Microsoft for business customers is yesterday's war.

That point will be particularly poignant as co-founder Larry Page prepares to take the CEO reins from Eric Schmidt, a former chief of Novell, in April. While Schmidt's business experience and perspective were shaped at a time when Microsoft was the technology industry's dominant power, it is not clear whether Page shares the same worldview.

"It's hard to see Larry focusing more on it (the enterprise business) than Eric did," said BGC analyst Colin Gillis.

Google's commitment to the enterprise business will not waver, Girouard said in an interview at the company's headquarters last month. Page, he noted, has been involved and supportive of the enterprise business from Day One.

"We are building out a team that's headed towards building a business of billions of dollars," he said. "And Larry is a smart, competitive guy; he knows it's a giant, giant market opportunity."

Google, which generated roughly $29 billion in total revenue last year, does not break out financial details for its enterprise business, though it has said in the past that the business is profitable and generates hundreds of millions of dollars in annual revenue.

Girouard, who is the president of Google's enterprise business, said the group's revenue growth rate has accelerated every quarter for the past two years. Revenue is now growing faster than any other cloud-computing company, he said, including Salesforce.com , which grew 30 per cent year-on-year in its fiscal third quarter.

Yun Kim, an analyst with Gleacher & Co, said investors are currently paying more attention to display advertising and mobile advertising than they are to the enterprise business as Google's next big growth opportunities.

But he said the enterprise group allows Google to leverage its extensive network computing infrastructure and to cross-sell to many of the same small and medium-sized businesses that are already Google's advertising customers.

The use of so-called cloud-based email by corporations is still in early stages, said Tom Austin, an analyst at research firm Gartner. But he expects that 10 per cent of companies with 500 people or more will have stopped maintaining their own email infrastructures and switched to Web-based email by the end of next year, or early 2013.

"At that point we expect the market to tip and the growth to accelerate significantly," said Austin, noting that the competition between Google and Microsoft in the online email market is closer than he had initially expected.

Social business

As it fights with Microsoft to win business customers, Google has snapped up technology and entrepreneurs.

Shan Sinha, who co-founded DocVerse, a start-up company that Google acquired last March, was recently tapped to oversee the broader set of messaging products in the enterprise business.

Weaving social networking features typically associated with consumer products into Google's enterprise software is a top priority for the business this year.

"You're going to see it in our messaging apps, you're going to see it in our address book, you're going to see it in the Docs apps. You're going to see more social technologies make their way through all of our applications," he said.

Google is also hoping its forthcoming Chrome operating system, intended for a new generation of Web-centric PCs, will complement the enterprise products and make an attractive package for corporate customers.

One of earliest enterprise group employees, Rajen Sheth, recently began a new role working with the Chrome team to build a version of the product specially designed for businesses.

"It's kind of natural extension of a lot of what we've done with Google apps," he said of Chrome.

Some critics have said that the success of Google's two-year-old Android operating system - used in smartphones and tablet PCs - defeats the need for a separate Chrome operating system.

But Sheth said that Chrome will fill an important need for businesses with workers who don't need full-fledged PCs, which are more expensive and cost more to maintain.

"There's a lot of pent-up demand for this within businesses - to really replace desktops and replace laptops," he said.

Reliance $9 billion deal with BP

Reliance Industries Limited (RIL) and BP on Monday announced a partnership between the two companies. Under the partnership BP will take a 30 per cent stake in 23 oil and gas blocks belonging to RIL in India.

The deal was signed in London by RIL Chairman and Managing Director Mukesh Ambani and BP Group Chief Executive Robert Dudley.

The partnership across the full value chain comprises BP taking a 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the producing KG D6 block, and the formation of a 50:50 joint venture between the two companies for the sourcing and marketing of gas in India.

The joint venture will also endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.

"We are delighted to partner with BP, one of the largest energy majors and one of the finest deep water exploration companies in the world. This partnership combines the skills of both companies and will be focused on finding more hydrocarbons in the deep water blocks of India and significantly contribute to India's energy security," said Mukesh Ambani.

BP hoped to leverage RIL's strong position in the Indian market.

"This partnership meets BP's strategy of forming alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets," said Carl-Henric Svanberg, Chairman of BP.

BP will pay RIL Limited an aggregate consideration of $7.2 billion, and completion adjustments, for the interests to be acquired in the 23 production sharing contracts. Future performance payments of up to $1.8 billion could be paid based on exploration success that results in development of commercial discoveries. These payments and combined investment could amount to $20 billion.

The 23 oil and gas blocks together cover approximately 270,000 square kilometres. This will make the partnership India’s largest private sector holder of exploration acreage.

BP has been working with RIL since December 2008 on the D-17 deepwater block in the Krishna Godavari (KG) basin on the east coast of India. BP, with a 50 per cent interest, operates the block and Reliance holds the remaining interest.

However, Oil Secretary S Sundareshan said that the RIL-BP deal will need the government's approval as New Exploration and Licensing Policy blocks are involved.