The Markets Aren't Y2oK
Fears of a FII pullout in case the Millennium Bug strikes made the bulls listless. And the bears are sharpening their claws.

All news is no longer good news for the stockmarkets. While the Foreign Institutional Investors (FIIs) were net buyers with Rs 978 crore in November, 1999, after 3 months of net selling, it did not show up on the indices, which moved up only marginally. Trading remained listless, with the BSE Sensex moving in a narrow band between 4,500 and 4,675. Profit-taking continued at higher levels, pulling back the Sensex every time it went up. Volumes on both the National Stock Exchange and the BSE were conspicuous by their weakness.

The infotech sector was the only one to outperform the Sensex. Infosys Technologies' share price touched a new high of Rs 9,000 on both the exchanges, and the market value of the scrip reached Rs 30,391 crore, closing in on the market capitalisation of Reliance Industries, which stood at Rs 33,189 crore. Other software stocks too ruled strong, and basked in the glory of Infosys. But, warns Jigar Shah, 28, an analyst at the securities firm, K.R. Choksey Securities: ''The trend seems inclined towards selective buying of stocks.''

However, the market could get a boost if there is good news on the policy front during the Winter Session of Parliament. Of course, market operators will start building up positions in stocks or warehousing on expectations of selling them to the FIIs. Says S.A. Narayanan, 39, COO, Kotak Mahindra Securities: ''Given the fundamentals of the economy, FII investment is likely to flow in by end-December, 1999.'' However, a Y2K-related fiat on the FIIs, asking them not to risk buying Indian stocks in case the Millennium Bug strikes, will hold back the bulls. The overall trend remains bearish, and, in the short term, a rally could be seen as an exit opportunity. That's not bull!

-Roshni Jayakar

THE CORPORATE INDIA
Wishlist, Yes. Wishful Thinking? May Be
The Chamber has stopped asking for concessions. Perhaps the government should listen now.

Finally, drama supplanted boredom. Annual sessions of the Federation of Indian Chambers of Commerce & Industry (FICCI) have, traditionally, been drab affairs. At the 72nd Annual Session, though, FICCI came of age. It demonstrated a new mindset, aimed at taking the body of largely family businesses into the competitive millennium. Far from seeking concessions, FICCI asked for fundamental changes in the way business is done in the country. Close on the heels of FICCI's announcing that consulting major Arthur Andersen will review and restructure the operations of the apex chamber, its resurgent confidence was also evident in the bold stance that it took on various economic reform measures.

Indeed, FICCI's outgoing President, Sudhir Jalan, set the tone at the Session by presenting a 10-point wish-list to Prime Minister Atal Bihari Vajpayee. The tone was aggressive, even chiding the government for not moving forward on many reforms issues, particularly those pertaining to labour laws and infrastructure. Quite a change for Indian business which, during the early years of the reforms programme in the early 1990s, had steadfastly blocked moves towards an exit policy and labour law changes. Says Jalan, 55: ''We need to embark on the path of reforming our archaic labour laws in tune with the times.'' His solution: permit companies to replace 5 per cent of the non-performing human resources with better and skilled resources.

Additionally, the infrastructure sector, in general, and the power sector, in particular, came in for scathing attack. FICCI's demand: both the distribution and the transmission of power should be privatised immediately. The Federation also called for a statutory ceiling on government borrowings and a moratorium on fresh subsidies, switchover to a value-added tax system, and immediate completion of the restructuring of the Central excise. The wish-list was rounded off with a demand for a complete and unambiguous implementation of the disinvestment programme for public sector banks and PSUs.

Also put on the priority-list was the Expenditure Management Reforms Commission. FICCI also called for consensus among the government and the main Opposition parties so that at least major economic Bills-particularly those related to insurance, Intellectual Property Rights, the Foreign Exchange Management Act, Money Laundering, and the Companies Act-are passed. There were some other demands, including one for a total revamp of the Essential Commodities Act, a reduction in the cost of exports as a major export incentive, and a second green revolution in the areas of grain and cash crops through agri-business and food-processing.

The new FICCI President, G.P. Goenka, 59, summed up the future: ''Special attention should be paid by the government, through policies, to the development of sunrise industries like infotech, knowledge-based industries, speciality chemicals, and bio-technology.'' Will FICCI's fix-it formula be the one that Team Vajpayee adopts?

-George Skaria

GOVERNMENT
Dreams Give Way To Realism
Finally, the government warned of tough measures instead of doling out promises.

It was a much wiser government that addressed business at the Annual General Meeting of the Federation of Indian Chambers of Commerce & Industry (FICCI). Gone were the till-death-do-us-part speeches. There were no grand promises of supporting corporates, reducing taxes, and giving more incentives. Instead, Prime Minister Atal Bihari Vajpayee's A-Team-Union Finance Minister Yashwant Sinha, Union Home Minister L.K. Advani, and Union Information & Broadcasting Minister Arun Jaitley-offered a rather realistic picture of what business could expect from the government in the New Millennium.

In fact, the real surprise was the Prime Minister's effort to not gloss over some of the worrying economic factors. Vajpayee dwelt on the fiscal situation, particularly that of the states, the policy pulls and pressures in the telecom sector, and the problems relating to the implementation of the ISP policy. He followed that with promises of action, and announced the formation of a high-level committee to sort out the policy issues on telecom and ISPs under Sinha's chairmanship.

Said Vajpayee, 73: ''I am convinced that faster growth required to reach the target of 7-8 per cent will be possible only with the faster pace of reforms.'' Sure. As Y.C. Deveshwar,52, CEO, ITC, reminded everyone: ''The problems that Indian economy will face in the next millennium are of a Herculean nature. Simultaneously needed is the speedy implementation of the reforms programme.''

On his part, Sinha was in no mood to make any promises, and gave a realistic picture of what would be possible by Budget 2000 given the tough economic situation. High on the agenda is a series of fiscal measures. Said Sinha, 62: ''The high interest rate is a matter of concern as we are aware of the debilitating effects. We cannot let it hamper Indian industry.'' But he was only willing to respond to the demand for a value-added tax regime by promising that the sales tax in the states would be overhauled to create just 4 slabs. Sinha also hinted that the various sales tax concessions given by state governments may be capitalised and given to companies as a subsidy.

If the ministerial utterances in the run-up to Budget 2000 are any indication, hard-headed pragmatism is here to stay within the government. With its political position stronger than ever before, the Vajpayee Administration will have no better opportunity to accelerate the reforms process. So, FICCI must be hoping that the government doesn't prove to be fickle again when it comes to delivering on its promises.

-George Skaria

INVESTMENT
Bangalore Tries To Delete Hyderabad
But the badly-managed expo shows why it is falling behind in the race for info-dollars.

It was a complex show alright-a manifestation of Bangalore's Hyderabad Complex. With the capital of Andhra Pradesh topping the destination-list of infotech investment over the past 2 years, Bangalore has been smarting. But a new government, led by the IBM-compatible Chief Minister S.M. Krishna, in Karnataka means that Bangalore is ready to give the new kid on the motherboard a run for its money.

So, IT.Com-ostensibly an industry trade show-at the Electronics City at Bangalore was a major initiative by the Karnataka government to counter the Chandrababu Naidu juggernaut. On the first day of the show, Krishna presented a string of incentives to infotech companies, including 100 per cent exemption on sales- and entry-tax for companies involved in the manufacturing and trading of infotech-related products. A Chief Minister's taskforce was set up, with Infosys Technologies Chairman N.R. Narayana Murthy designated as its head. Cyber-parks will be set up in Mysore, Hubli, and Mangalore to act as incubation units.

A separate department of infotech is also being set up to promote rapid e-governance in the state, and to ensure the continued flow of infotech investments. A hint of sales-tax exemption on all e-commerce transactions was dropped too. The emphasis, clearly, was on the state's commitment to being the infotech capital of the country. However, offering incentives is not enough to bring in investments. And IT.Com proved as much.

For, it highlighted skills the good intentions, but the poor implementation of the Karnataka Government. Lack of planning and adequate infrastructure for an event of such dimensions undermined the entire effort. The event was a big one: there were more than 300 companies, and the number of business visitors was estimated at 50,000. In terms of management, however, it left a lot to be desired. Power proved to be a problem and, at times, rendered ineffectual the endeavour of companies to showcase their hi-tech equipment. Why, participants did not even have access to an accurate events schedule.

Of the 9 pavilions, the one that generated the maximum excitement was that of Linux. In fact, the Linux user-group had arranged tutorials every day in the pavilion. The growing popularity of this operating system, which is giving Windows a run for its money, is also evident from the fact that some Indian companies have started developing Linux-based products. The Bangalore-based Peacock Solutions, for instance, has created a Geographic Information System based on Linux. Also competing for attention was Texas Instruments' solution for Internet telephony.

Although the exhibition was, on the whole, impressive, the seminars were lacking in terms of content, and were not well-attended. Also, there was no convention centre of international standards. This problem might be addressed soon as the Chief Minister announced the allocation of 35 acres next to Electronics City for building a new convention centre.

The comeback bid may not have been ideal, but Bangalore's infotech community is happy that, after years of neglect, developing the industry is, once again, on the priority-list of the government. As Infosys Technologies' Managing Director and coo, Nandan Nilekani, 43, said: ''Bangalore is-and always will be-the Silicon Valley of India.'' Bangalore had better not bank on that.