Global Unemployment

The phenomenon of growing unemployment across the world has become a regular feature across daily news stories. This is not restricted to one nation or region but seems to be happening across all countries. Higher structural unemployment has become an accepted fact. Some countries like Greece, Portugal and Spain are seeing depression like unemployment levels. Emerging giants like India and China are seeing massive underemployment as well. White collar workers are making less money than blue collar workers, as millions of graduates come out of universities each year. There are just not enough jobs for the existing workforce, let alone the millions who come out ever year. In India even elite universities like the IIMs are having difficulty in getting jobs for their graduates.

The reasons for the growing unemployment are in my view:

a) Growing population

b) Rising globalization which is leading to depression of salaries everywhere

c) Capital is getting ascendancy over labor due to wrong policies pursued by the governments ( lack of big inheritance taxes, softness on tax evasion etc.)

Now an improvement in robot technology has started to pressurize labor. Foxconn which is amongst the largest private employers in the world with over a million workers is planning to replace a large chunk of its workforce with robots. Note Foxconn is repeatedly in the news for worker suicides. A spate of suicides at Taiwan’s Foxconn factories made media headlines forcing the company to increase wages under international customer pressure.

Asian White collar workers face Unemployment and Low Wages due to Increasing College Education

As India grows more prosperous and more citizens get educated, the country is facing a major problem. While every country would kill for millions of graduates passing out every year, India is finding them to be a problem. The reason is that India is seeing jobless growth with a paucity of decent jobs on offer. The real topline growth of companies has stagnated and profits are not growing. In such an environment, hiring is anemic and restricted to a few sectors only. Corruption infested sectors such as telecom, aviation, construction have seen massive layoffs in recent times. The IT industry which used to be major employer of fresh graduates is also getting saturated and cannot find jobs for the torrents of graduates that pass out every year. The income inequalities are becoming more and more stark as billion dollar houses get built, while hundreds of millions finding it difficult to find two meals a day. This socioeconomic malaise is generally ignored by kool aid drinking investors pouring the billions of dollars into the India stock market fulled by zero interest rates.

The spectacular growth in Asian economies like China, South Korea, HK, Taiwan over the last two decades has raised millions from poverty to a middle class life. This has led to increasing education levels among the new generation of Asians. Parents have poured a large part of their earnings into children education, which was seen as a ticket to a better life. But many of these newly entered work force participants are not finding the pot of gold at end of the rainbow. This is because the population of college graduated workers has increased significantly, putting  the laws of supply-demand against these workers. In fact  the wages of college educated workers have declined in some cases.

Perversely for these educated Asians, the wages of Blue Collar workers has increased at a much faster pace compared to the White Collar workers. While the wages for highly in demand skill-sets and experience approach those of the western counterparts, the wages for those with little experience and “commoditized  college degrees” continues to remain stagnant. This has been the experience in many countries across Asia like South Korea, India, China.

ET

Taiwan’s tech giant Foxconn will hire 5,000 technicians locally this year, many of them to work on factory robots to build its gadgets, officials said Monday, in a sign the firm is refocusing operations to its home island.Foxconn said the move was due to increasing automation of manufacturing and assembly lines in China, where rising labour costs have squeezed profit margins.

Some of the new employees are to work at a software complex in Kaohsiung, in southern Taiwan, spokeswoman Laura Liu said, while others will staff a robot research unit in the centre of the island, and a development unit at the company’s headquarters outside Taipei.Chairman Terry Gou told media that Foxconn — the world’s largest maker of computer components, which assembles products for Apple, Sony and Nokia — plans to use one million robots to do “simple” manufacturing work by 2014.

Indian Budget 2013-14

The finance minister Mr. P Chidambaram recently unveiled a bigger-than-expected outlay for the coming fiscal year in what is known to be one of the most highly anticipated Indian budgets of recent years.

Some of the highlights of the budget are elucidated as under:

FISCAL DEFICIT

  • The year 2012-13 saw fiscal deficit at 5.2% of GDP, which is a matter of concern for the country as rising fiscal deficit lead to inflation and country’s sovereign rating is hampered
  • For the year 2013-14, fiscal deficit is targeted at 4.8%
  • India has to rationalize the expenditure due to the huge fiscal deficit

BORROWING

  • Gross market borrowing is projected at 6.29 trillion rupees in 2013/14, where in short term borrowing is seen at 198.44 billion rupees in 2013/14
  • India to buy back 500 billion rupees worth of bonds in 2013/14.

SUBSIDIES

  • Major subsidies bill estimated at 2.48 trillion rupees from 1.82 trillion rupees in the year 2013-14. Petroleum subsidy projected at 650 billion rupees in 2013-14. Revised petroleum subsidy for 2012-13 at 968.8 billion rupees
  • Food subsidies in 2013-14 estimated at 900 billion rupees. Revised food subsidies at 850 billion rupees in 2012-13
  • Fertilizer subsidy revised at 659.7 billion rupees for 2012-13.

GROWTH

  • The economy is facing the biggest challenge of getting back to its growth back to the rate of 8 point. Growth must be embraced as highest goal as of now for the economy.

SPENDING

  • Total budget expenditure is seen at 16.65 trillion rupees in 2013-14 of which non-plan expenditure is estimated at about 11.1 trillion rupees and planned expenditure is seen at 5.55 trillion rupees
  • Total expenditure for 2012-13 revised at 14.3 trillion rupees which is 96 point of budget estimate.

REVENUE

  • Direct tax proposal in 2013-14 is expected at 133 billion rupees where as 47 billion rupees through indirect tax proposals.
  • Stake sales in state-run firms will fetch around 558.14 billion in 2013-14. Revenue of 408.5 billion rupees is expected from airwave surcharges, auction of telecom spectrum, etc. 2013-14.

CURRENT ACCOUNT DEFICIT

  • CAD is India’s greatest worry. More than $75 billion is required this year and next year to fund the deficit. Food inflation is a sign of worry and proper steps to check the supply side will be taken so as to control the inflation in primary articles.

TAX

  • Surcharge of 10 point on rich taxpayers with annual income of more than 10 million rupees a year is to be implemented. Also an increment of surcharge to 10 point on domestic companies with annual income of more than 100 million rupees will be implemented.
  • Surcharge for foreign companies paying higher rate of corporate tax will be increased from 2 pct to 5 pct.
  • 15 point tax concession on dividend received by India companies from foreign units will be continued for a period of one year
  • Withholding tax of 20 point on profit distribution to shareholders is proposed
  • Reduction in STT on equity futures to 0.01 point from 0.017 point to encourage participation. Also a proposal to introduce commodities transaction tax (CTT) will be implemented if required. CTT on non-agriculture futures contracts at 0.01 point.

CORPORATE SECTOR AND MARKETS

  • Issue of inflation-indexed bonds
  • Capital allowance of 15 point to companies on investments of more than 1 billion rupees
  • Investment in corporate, government bonds to allowed to use as margin requirement for Foreign institutional investors (FIIs)
  • Allowing Insurance, provident funds to trade directly in debt segments of stock exchanges
  • Allowing FIIs to hedge foreign exchange exposure with exchange-traded derivatives
  • Investors to be regarded as FII and FDI on the basis of the percent stake. Investor with less than 10 point stake in a company will be regarded as FII and FDI the other way round
  • KYC norms for foreign portfolio investors to be simplified by stock exchange regulator.

POWER AND ENERGY SECTOR

  • Zero customs duty for electrical plants and machinery
  • Move to revenue-sharing from profit-sharing policy in oil and gas sector.

Read more about Oil & Gas Companies in India.

FOREIGN TRADE

  • Duty cut on exports of precious and semi-precious stones to 2 point from 10 point
  • No duty on import of ships, vessels.

BANKING

  • Capital infusion to State-run banks to the tune of 140 billion rupees in 2013-14.

Read more about Top Ten Banks in India.

DEFENCE

  • 2.03 trillion rupees allocated to defence in 2013-14.

AGRICULTURE

  • Allocation of 801.94 billion rupees to rural development in 2013-14 along with the allocation of 270.49 billion rupees for agriculture in 2013-14.

As far as the budget is concerned the finance minister has very well looked into the key problems of Indian economy which is CAD, fiscal deficit and the rising inflation (mainly the primary articles). Finance Minister’s target of maintaining the deficit at the level of 4.8 is undoubtedly a positive move and will help in curbing the inflation.

Reliance Industries Limited (RIL)

  • RIL is an Indian conglomerate company
  • Headquartered in Mumbai, Maharashtra India
  • RIL is one of the largest publicly traded company in India by market capitalization
  • Second largest company in India by revenue after Indian Oil Corporation Ltd. (IOCL)
  • India’s largest private sector company by revenue and profit
  • Ranked 99th on Fortune Global 500 list of the world’s biggest corporations for the year 2012

Reliance Industries Businesses

Company operates through three business segments:

Other divisions of the company include:

  • Textiles
  • Retail business
  • Special economic zone (SEZ) development
  • Telecom/broadband business

Reliance Retail

Reliance Retail Limited (RRL), a subsidiary of RIL, was set up to lead Reliance Group’s foray into organized retail in the year 2006. RRL since its inception has grown into an organization that caters to millions of customers, thousands of farmers and vendors. Based on its core growth strategy of backward integration, RRL has made rapid progress towards building an entire value chain starting from the farmers to the end consumers.

In optics business company has partnered with Grand Vision to provide Vision Express frames, lenses, contact lenses, sunglasses, solutions and accessories. For kids division, company partnered with Hamleys, which is considered to be the world’s most wonderful toy shop. iStore by Reliance Digital is a one-stop-shop for all Apple products and services. Reliance also partnered with two leading international brands:

  • Steve Madden which is a leading fashion designer for clothing, footwear and accessories for women, men and children
  • Quiksilver which is a leading outdoor sports lifestyle company with brands ‘Quiksilver’ and ‘Roxy’ under its kitty

Reliance Retail serves over 2.5 million customers every week

Subsidiaries and Divisions

There are various Subsidiaries & division under Reliance Retail. Following is the list of all of them:

  • Reliance Fresh – Retail Outlets of fruits, Vegetables & Groceries.
  • Reliance Digital – Consumer Electronics retail Store
  • Reliance Jewels – Jewellery
  • Reliance Time Out – Lifestyle store of Books, Music, Movies, Toys, Gaming, Fragrances, Stationery
  • Reliance Trends – Apparel and Clothing.

Reliance Financials

It is needless to say that Reliance Industries is one of the largest companies in India. Company has tons of cash in its balance sheet as can been seen by the table below:

(in Rs. Crores) Mar-12 Mar-11 Mar-10 Mar-09
Cash and Cash Equivalents at Beginning of the year 27135 13463 22176.53 4280.05
Net Cash from Operating Activities 26974 33280 20490.22 18245.86
Net Cash Used in Investing Activities -3046 -20333 -18204.5 -24081.96
Net Cash Used in Financing Activities -11465 725 -10999.6 23732.58
Net Inc/(Dec) in Cash and Cash Equivalent 12463 13672 -8713.88 17896.48
Cash and Cash Equivalents at End of the year 39598 27135 13462.7 22176.5

 

Mar-12 Mar-11 Mar-10 Mar-09
Key Ratios
Debt-Equity Ratio 0.44 0.47 0.56 0.57
Long Term Debt-Equity Ratio 0.32 0.39 0.51 0.49
Current Ratio 1.15 1.03 1.07 1.06
Turnover Ratios
Fixed Assets 1.63 1.22 1.16 1.21
Inventory 10.33 9.11 9.58 10.06
Debtors 18.95 17.78 24.69 27.1
ROCE (%) 12.77 13.63 11.89 13.21
RONW (%) 12.97 14.78 13.37 15.69

 

The Company has strong D/E ratio, thanks to its pile of cash. Reliance is one of the most cash rich company having piles of cash under its kitty. The current ratio has improved from the previous years.  If we look at the turnover ratios we see that the company’s fixed assets are performing pretty well and also the inventory. The return on the capital employed and net worth has decline though. 

Mar-12 Mar-11 Mar-10 Mar-09
Price Earning (P/E) 12.47 17.23 22.12 15.99
Price to Book Value ( P/BV) 1.5 2.35 2.74 2.09
EV/EBIDTA 6.88 9.31 12.12 11.49
Market Cap/Sales 0.72 1.33 1.75 1.64

 

We see a steep decline in the P/E ration of the company from past years, is a matter of concern for the company. The investors’ willingness to pay for the company’s stock has been declining. Also if we see the multiple valuation of the company we see that the company has underperformed in all the three multiples.

Year End Dividend(%) Div Yield(%)
201203 85 1.14
201103 80 0.76
201003 70 0.65
200903 130 1.71
200803 130 1.15

 

The company has been paying continuously so as to boost the confidence of shareholders towards the company and also to help share perform better in the stock market.

Outlook

Global growth in refinery capacity addition is expected to outpace growth in demand and will keep a check on operating rates. Demand in Europe and the US is expected to shrink or at best stay unchanged. European refiners are already facing the brunt of economic slowdown and high oil prices. FY 2011-12 witnessed several refinery closures in Europe and the US. Overall outlook for refining industry continues to remain challenging. Margin is further expected to fall in FY’13.

Capital Market

capital market is a market for securities which can be either debt or equity, where business enterprises which includes companies and governments can raise long-term funds. In other words it is defined as a market in which money is provided for a period of more than a year.

The capital market includes the stock market where the equity securities are traded and the bond market where the debt securities are traded. Financial regulators, such as the India’s Securities and Exchange Board of India (SEBI) or the U.S. Securities and Exchange Commission (SEC), oversee the capital markets in their designated jurisdictions to ensure that investors are protected against fraud, among other duties. Certain rules and regulations are formulated by them which must be adhered to so as to safeguard the interest of the investors.

Classification of Capital Market

Based on the type of securities traded capital market is divided into two parts: stock market and bond market.

  • Stock Market A stock market or equity market is a public entity for the trading of company stock i.e., shares and derivatives at an agreed price. For Example: Bombay Stock Exchange or BSE is one of the oldest stock exchanges and also enjoys its stature of being the fourth largest stock exchange in Asia, deals with the trading of securities where about 5,085 Indian companies are listed.

Read On GWI How to invest in the India Stock Market where Management Quality is a choice between Bad and Ugly.

  • Bond Market The bond market which is also known as the credit, or fixed income market is that part of capital market market where participants buy and sell debt securities which are usually in the form of bonds. The Securities Industry and Financial Markets Association, SIFMAclassifies the bond market into five different specific segments:
    • Corporate
    • Government & agency
    • Municipal
    • Mortgage backed, asset backed, and collateralized debt obligation
    • Funding

Also the Capital markets may be classified as primary markets and secondary markets based on the nature of trading facilitated by it.

  • Primary Market – It is that part of capital market in which new stock or bond issues are sold to investors via a mechanism which is known as underwriting.
  • Secondary Market – It is that part of capital market where the existing securities are traded among investors or traders usually on a securities exchange, over-the-counter, or elsewhere,

Challenges of the Indian Capital Market

Indian Economy is the tenth largest economy in the world by nominal GDP and the fourth largest by purchasing power parity (PPP). Following a strong economic reform post-independence socialist economy, the country’s economic growth progressed at a rapid pace, as the LPG policy was implemented in 1991 for international competition and foreign investment. Despite fast economic growth, India still faces massive income inequalities, high unemployment and malnutrition.

Following are the main challenges which act as a hurdle in the growth of capital market:

1) Inflation – Inflation is the rate at which the prices for goods and services are rising and subsequently, purchasing power is falling. The inflation situation in the economy continues to be a cause of concern. Despite tightening of the monetary policy by the apex of India, RBI and other steps taken by the government, inflation continues to remain close to the double digit mark. High international oil prices, high global food prices are some of the causes of high inflation.

2) GDP – The growth figures for Indian economy are highly disappointing and highlight an unmistakable downward trend. GDP is expected to grow by ~5-6% 2012-13. Sectors like manufacturing and mining have seen a considerable erosion of growth momentum.

3) Index of Industrial Production – Weakness in industrial production trend continues to be a point of concern for the economy. The recent IIP numbers was registered below expectation. Weakness was seen with growth in the capital goods segment, intermediate goods segment and consumer goods segment which slowed down drastically during these months.

4) Population – The current population of India is over 1.23 billion, making it the second most populous country in the world after China, with over 1.35 billion people. India represents almost 17.31% of the world’s population which is a serious concern. If the trend of growth continues, the crown of the world’s most populous country will move on India from China by 2030. The population growth rate is at 1.58% with which it is predicted India would reach 1.5 billion mark by 2030.

India’s Population in 2012 1.23 billion
Population of India in 1947 350 million

 

5) Non uniform Tax reforms – With the non uniformity in the tax system across the states it is a difficult task to carry out the businesses which resulted in undergrowth of the same. The different tax rates implemented in some states across pan India is a major challenge to carry out the business smoothly and also it accounts for a reason of increasing prices of goods and services.

6) Foreign Policy – Foreign investment flows into India saw a dip of about 17% in the year 2010-11 over the previous year. This dip is largely on account of a slowdown seen in case of FDI. In 2009-10, FDI inflows totaled US$ 37.7 billion which was reduced to US$ 27 billion in 2010-11. Of the top 25 sectors, 15 sectors have seen a dip in FDI flows during April – Feb 2010-11, compared to the same period in 2009-10. These sectors involve services, construction, housing and real estate, telecommunication and agricultural services, where investment flows have slowed down considerably.

7) Education and Unemployment9.4 % of the population is unemployed which is yet another alarming issue for the growing nation. The literacy rate in India is 74.04% as of April 2011 which constitutes of 65.46% females and 82.14% males. The literacy rate is increasing but the rate of increment is low, which again is a matter of concern.

8) Poverty – About 37 % of Indian population lies below poverty line which is a very alarming situation for a growing economy like India. The main reason for such diversity is the uneven distribution of wealth in the economy where a handful of people are the owner of maximum revenue and the majority of the population is too poor to even arrange for their daily bread. The distribution of wealth in India resembles the pyramid model. The pyramid states that the base of the pyramid is the poor people which is maximum in number, while the high net worth people is very few in numbers which resembles to the top of pyramid. As the wealth increases the number of people in the category decreases.

Conclusion

Though it is very difficult to conclude about the capital market in short but still to maintain the legacy it should go on like:

Indian market is a booming market; it has scope of development in sectors like Pharmaceuticals, Retail industry, Automobiles, Education, etc. FDI should be allowed in sectors to attract the foreign investors though keeping our own economy stable of its own and not mostly dependent on global market. Inter and Intra terrestrial issues should be dealt with proper policy making and divestment of PSU’s and inviting private players in sectors like Railways, Infrastructure should be done so as to boost the overall growth of the economy and thus the market as it is the market which drives the economy and vice-versa.

“Market and Economy are the two sides of the same coin and cannot be separated”

Andhra Pradesh which is the largest southern Indian state has seen a good response to its tender for 900 MW of solar capacity. The state is using the tried and tested solution of reverse auction to promote solar energy in the state. Indian states particularly the southern ones are heavily power deficient with industries leaving the state due to lack of power. Thermal plants have run into huge time and cost delays, due to problems in procurement of fuel as environmental issues. Solar Energy is environment friendly and also can be set up quickly. More importantly it does not need fossil fuel which India does not have.

Other states like Gujarat and Tamil Nadu have also held successful subsidy schemes. TN is already implementing a scheme to boost solar energy by ~1 GW a year. Andhra Pradesh looks like it will manage to successfully follow the examples of others. The prices of the solar bids were to be known in March. Reverse auctions have led to sharper fall in solar energy power prices and current expectations are for bids as low as ~11c/kwh. This is a huge fall from the ~20c/kwh solar prices seen in the JNNSM solar auction 3 years ago. At that time this 20c/kwh had surprised analysts for being too low. The continuous solar panel price declines have made even these super low price fall by another ~50%, thanks to the Chinese manufacturing juggernaut.

Andhra Pradesh Solar Policy

AP had earlier announced a solar policy in which it had given a number of sops such as there will be no wheeling and transmission charges for wheeling of power generated from the Solar Power Projects, to the desired location/s for captive use/ third party sale within the state through 33 KV system, subject to industries maintaining their demand within its contracted demand. Cross subsidy surcharge shall not be applicable for Open Access obtained for third party sale within the state subject to the industries maintaining their demand within its contracted demand with the DISCOMs.

All Solar Power projects will be exempted from paying Electricity Duty for captive consumption and third party sale within the state. All projects developed with the above incentives will also be eligible for REC benefits. Deemed injection into the grid for in-house captive solar generation plant (in the same premises) will be considered for issue of REC. Solar projects will get refunds on value-added tax paid for equipment and on land duty and registration charges for sites. Fast Track Approval Process permits to build grid connections within 21 days. These incentives will be in force for a period of seven years from the date of implementation. New and Renewable Energy Development Corporation of A.P. Ltd (NREDCAP) shall be the State Govt. Nodal Agency for clearance, facilitation and implementation of the proposed Solar Power Policy. These incentives will be available for 7 years for solar power plant developers building a solar panel plant till June 2014.

The Policy has been tweaked now with the government giving out solar power plants using a reverse auction tender for 1160 MW to make the process more transparent.

Read more about Solar Panels in India – Complete Guide on Buying Low Cost PV Panels.

1160 MW Andhra Pradesh Solar Tender – Highlights

1) Tender submission date is January 19, 2013 – Close to the last dates of submission of solar tender in TN which will lead to complexity and confusion. I think this could have been avoided but collaboration between different arms of the governments in India is non-existent.

2) Nodal Agency is APTransco – The state owned transmission and distribution company APTrasco will be the nodal agency responsible for the entire process of tender opening, awarding and execution. The agency has already allocated transmission capacity by reservicing substations. This is a good move as evacuation of solar energy to the power grid is a major headache for solar developers.

3) Size of the Solar Power Plant – Solar energy ground plants can be built in minimum 1 MW and maximum 20 MW.

4) Technology – There is no difference in the price being given for different solar technologies. This means that the expensive solar thermal technology is effectively out of the race.

5) PPA Term – The winning solar developer will get a Power Purchasing Agreement for 25 years.

More DETAILS

1) Capacity – Selection of Solar power projects in Andhra Pradesh under competitive bidding route for a capacity about 1,000 MW is as per the AP Solar State Policy.

2) Net worth – The net worth of the bidder should be equal to or greater than the value calculated at the rate of Rs 1 Crore per MW.

3) Technical – The bidder shall deploy commercially established solar PV/STP technology.

4) Lowest Bid Price will have to be matched – Selection of eligible bidders will be based on least quoted price per commercial unit of electricity.

Andhra Solar Energy Policy Problems

1) Solar Power Purchase price too low – There are number of issues that have already cropped up with the solar energy policy. The state owned power generation company AP Genco has decided not to bid even for a single MW blaming the subsidy price for buying solar power as too low. The generation company says that the price of 12-14c/ Kwh will not allow decent returns.

2) Lack of clarity on timely payments – This is another problem faced by all power producers (fossil fuel and renewable alike). Most of the distribution utilities in the country are bankrupt due to the crazy uneconomic policies followed by the state government . Getting money from them becomes a tough game as wind power developers in TN will attest too.

3) High processing costs – The solar developers are also finding problems for the high processing costs being charged by APTransco.

4) Differential tariffs depending on region – The state wants to give different feed in tariffs depending on the location’s solar insolation. This is a good measure in my view which should be followed by all governments. However solar developers unaccustomed to differential geographic tariffs are finding faults.

You can get more details about the solar policy and tenders.

Tamil Nadu Solar Energy Policy Review and Analysis

Title and Enforcement

This policy will be known as the “Tamil Nadu Solar Energy Policy – 2012”. The Government of Tamil Nadu will undertake a review of this Policy as and when required in view of any technological breakthrough or any changes taking place in the policy at the National level.

Key Objectives

  • To project Tamil Nadu as a Solar Hub
  • To generate 3000 MW of Solar Energy by 2015
  • To achieve grid parity by 2015
  • To encourage indigenous solar manufacturing facilities in the State

Development of Solar Power in Tamil Nadu

Phase (2013-2015)                Target (MW)

2013                                          1000

2014                                          1000

2015                                          1000

Total (by 2015)                     3000

With average solar incidence of 5.5-6 kWh/m2/day, Tamil Nadu is amongst the states with the highest solar insolation in India. To retain its leadership position, Tamil Nadu will promote setting up solar power projects to the extent of 3000 MW over a period of 3 years, as furnished above.

Tamil Nadu will actively promote the solar energy sector by prescribing a certain percentage of electricity consumption through solar energy as mandatory. This will be progressively increased.

Solar Purchase Obligation (SPO)

The State will mandate 6% SPO (starting with 3% till December 2013 and 6% from January 2014) for the following category of consumers:

HT Consumers (HT Tariff I to V)

This category will cover all HT consumers including:

  • Special Economic Zones (SEZs)
  • Industries guaranteed with 24/7 power supply
  • IT Parks, Telecom Towers
  • All Colleges & Residential Schools
  • Buildings with a built up area of 20,000 sq.m or more

The SPO will be administered by TANGEDCO.

The above obligated consumers may fulfill their SPO by

  • Generating captive Solar Power in Tamil Nadu equivalent to or more than their SPO
  • Buying equivalent to or more than their SPO from other third party developers of Solar Power projects in Tamil Nadu
  • Buying RECs generated by Solar Power projects in Tamil Nadu equivalent to or more than their SPO
  • Purchasing power from TANGEDCO at Solar Tariff
  • Consumers desirous of availing SPO exemption by captive solar generation shall necessarily install separate meters to measure captive generation

This mechanism will require generation of 1000 MW by 2015.

Mechanism to generate 3000 MW by 2015

The 3000 MW of Solar Power will be achieved through Utility Scale Projects, Rooftops, and under REC mechanism as follows:

Utility Scale (MW) Solar Roof Tops (MW) REC (MW) Total (MW)
(a) (b) (c) a + b +c
2013 750 100 150 1000
2014 550 125 325 1000
2015 125 125 675 1000
Total 1500 350 1150  3000

In utility scale out of 1500 MW, 1000 MW will be funded through SPO and balance 500 MW through Generation Based Incentive (GBI) provided by the Government.

HINDU

The Andhra Pradesh Government has received more than 180 bids for setting up solar photovoltaic power plants in the State. On the extended date for solar bids, which ended at 3 pm on Saturday, it is learnt that the response was good. However, the details of the participants and the prices they have quoted will be known later when the bid documents submitted by the participants are scrutinised.

The price quotes will be known on March 1 when the bids are processed. There was indication that the bids could be for projects with total capacity of about 900 MW. Following the State Government solar policy, AP Transco, which was appointed the nodal agency for the solar photovoltaic power project implementation, had invited bids to set up a capacity of about 1,000 MW in the State. It is proposed to set up these power projects within one year.

As India grows more prosperous and more citizens get educated, the country is facing a major problem. While every country would kill for millions of graduates passing out every year, India is finding them to be a problem. The reason is that India is seeing jobless growth with a paucity of decent jobs on offer. The real topline growth of companies has stagnated and profits are not growing. In such an environment, hiring is anemic and restricted to a few sectors only. Corruption infested sectors such as telecom, aviation, construction have seen massive layoffs in recent times. The IT industry which used to be major employer of fresh graduates is also getting saturated and cannot find jobs for the torrents of graduates that pass out every year. The income inequalities are becoming more and more stark as billion dollar houses get built, while hundreds of millions finding it difficult to find two meals a day. This socioeconomic malaise is generally ignored by kool aid drinking investors pouring the billions of dollars into the India stock market fulled by zero interest rates.

ET

If you look at what happened in 2012, NASSCOM numbers, for example say 1.7 lakh people got additional jobs, are significant. In this environment, 1.7 lakh jobs are being created and these are good paying jobs. These are jobs that are created primarily for graduate. Under these circumstances, I would rate this very good.Now, even if the industry grows at around, let us say, 12% to 14% in 2013, an additional 1.7 to 2 lakh jobs will be created, and that is very significant. There are very few other sectors that are creating that many numbers of new jobs. I am actually optimistic. Having said that, of course we are about 7,00,000 to 8,00,000 graduates coming out, means that many of them will have to look for jobs in other sectors rather than just the IT sector. So there is some positive news in this, but it also means that the other sectors will also have to grow for the job scenario to improve. This is where I look at the overall growth of the Indian GDP. We need to get the growth back to 7-8%, which seems to be challenging right now. We all need to work together to see the growth goes back to 7-8%.

Asian White collar workers face Unemployment and Low Wages due to Increasing College Education

The spectacular growth in Asian economies like China, South Korea, HK, Taiwan over the last two decades has raised millions from poverty to a middle class life. This has led to increasing education levels among the new generation of Asians. Parents have poured a large part of their earnings into children education, which was seen as a ticket to a better life. But many of these newly entered work force participants are not finding the pot of gold at end of the rainbow. This is because the population of college graduated workers has increased significantly, putting  the laws of supply-demand against these workers. In fact  the wages of college educated workers have declined in some cases.

Perversely for these educated Asians, the wages of Blue Collar workers has increased at a much faster pace compared to the White Collar workers. While the wages for highly in demand skill-sets and experience approach those of the western counterparts, the wages for those with little experience and “commoditized  college degrees” continues to remain stagnant. This has been the experience in many countries across Asia like South Korea, India, China.