The Europe-India aviation market: new opportunities and potential riches

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As India’s aviation policy has opened up over the past four years, European airlines have finally begun to achieve more market-oriented capacity levels, and to gain access to new gateways. India, with its enormous human resources and wealth, not only offers remarkable potential as a market in its own right, but also sits astride major routes to the Far East. Were it not for previous governments’ restrictive aviation policies, India would also be a major distribution hub, a potential it carries, once its chronic infrastructure shortage is eased.

The features of a closed market, as India previously was, include gratuitously providing high yielding traffic for sixth freedom carriers, who, in a capacity-limited market, were able to offer a good quality of service and a wide range of destinations over their hubs. Thus, for example, a little over two years ago there was no non-stop service between the US and India; today there are 42 services a week, by Indian and US carriers.

This aspect of India’s liberalisation has been a mixed blessing for European airlines. In a heavily regulated regime, Lufthansa, British Airways (BA) and Air France all profited from this market profile. At the same time however, growth in the international market is opening up new opportunities, to replace the dilution of this advantage.

International Passenger growth to/from India

Source: Centre for Asia Pacific Aviation and Airports Authority of IndiaNote: Financial years to 31-Mar

As new gateways open up in India, the variety of service combinations possible over their European hubs improves, helping them maintain an edge. Lufthansa, the biggest of the European carriers in the Indian market, has a relatively comprehensive network from six (shortly to be seven) gateways - Mumbai, Delhi, Bangalore, Hyderabad, Chennai and Kolkata - with 49 weekly frequencies.

The UK, with its large non-resident-Indian (NRI) community, has experienced strong service growth since bilateral liberalisation was introduced. As a result of liberalisation of the UK-India bilateral agreement, weekly non-stop services between the two countries have increased from 34 per week in Oct-04 to 107 times weekly today, operated by 4 carriers (British Airways, Virgin, Air India and Jet Airways, soon to be joined by a fifth, in Kingfisher Airlines).
BA’s service frequency will have grown from 19 times weekly in Oct-04, to 48 by Oct-08, and India will be its largest market outside of North America. Meanwhile, the Middle East short-haul market is burgeoning and Gulf carriers are also quick to expand their hub networks to incorporate Indian points; Emirates for example will operate to ten points in India, with 105 services a week by Jul-08.

Source: Centre for Asia Pacific Aviation and OAG

An attractive feature of the Indian market is its still-high proportion of premium traffic. Following All Nippon Airways’ launch of a successful all-business class service between Narita and Mumbai in Sep-07, which was recently increased from 6 times weekly to daily, Lufthansa will introduce the first longhaul international service to Pune, near Mumbai, in Jul-08. This too is an all-business class service and will bring Lufthansa’s weekly frequencies to 55.

Carriers like Finnair too experience good yields; over 50% of traffic on its Helsinki route are business travellers and Finland will seek an increase in the current 14 weekly services permitted to each side at bilateral discussions scheduled for Aug-08.

As the fledgling Indian airlines spread their wing into longhaul operations, they are, of necessity,

introducing innovative ways of achieving competitiveness.

Privately owned Jet Airways has established a European hub at Brussels, connecting Delhi, Mumbai and Chennai on the one side, to New York JFK, Newark and Toronto. These operations make use of the liberal access provisions available through the Belgium-US open skies agreement (and the absence of opposition from a protective national flag carrier). Jet is also reportedly considering using Milan, if Alitalia withdraws from Malpensa, voluntarily or otherwise.

The other high profile private new entrant, Kingfisher Airlines has also apparently been in discussions to set up a hub in Madrid. Iberia has no Asian services and there are considerable complementary route options.

Air India, one of the world’s longest standing airlines, is however lagging the field, as it considers hubs in either Munich or Vienna. Struggling to adapt to the increasingly competitive environment and the challenges of merging with government-owned sister company, domestic Indian Airlines, it has yet to show its full potential. It will take many more months before it emerges as a valuable partner to the Star Alliance, to whose membership it has been invited. As Jet and Kingfisher expand, they will become much more attractive to the global alliances, offering significant challenges to Air India.

Although domestic growth is now slowing, international traffic to/from India looks set to achieve double-digit growth for several years to come. The Government has shown its willingness to enter into increasingly liberal bilateral agreements and an array of foreign carriers are positioning themselves to compete for a share of this lucrative market.

The battle for position will be intriguing. Air India, Jet Airways and Kingfisher Airlines between them have 112 widebody aircraft on order, scheduled for delivery over the next 5 years and Europe and North America are expected to feature strongly in their network expansion plans. And, as partnerships - and even merger activity - grows, these home grown products will become increasingly attractive.

IATA: Europe business confidence falling in Apr-08; growth deteriorating sharply

IATA’s latest report on international traffic, for the month of April, continues a very gloomy tone, as growth slows across the world and load factors trend remorselessly downwards †“the clearest sign that airlines have been facing a faster than anticipated slowdown since the start of the year.”


Load factors fell “significantly” in Apr-08. As the report notes, this is “also bad news for airline profitability since the 70% rise in crude oil prices to an average USD98 a barrel in Q108 will have raised break-even load factors substantially

In Europe, the load factor picture is less attractive still, showing almost as steep a load factor fall for the month as the US.And Europe more steeply than the average…

The figures are distorted to some extent in comparisons with last year as a result of Easter falling in March in 2008. But the trend is unavoidable.Growth is slowing faster than expected – just as fuel prices rise much faster than expected. Again, Europe’s growth rate has declined steeply by global standards.

Delivering To The People - Chindia Style'

(A very nice article on the disaster management - China and India style)

When Lisbon shook in 1755, Voltaire asked if God was at all just. Why did he not instead shift the earth under London and Paris which were infinitely more sinful? When the earthquake hit Sichuan earlier this month, many Chinese too wondered if this was a divine intervention. Had they done something terribly wrong that such devastation should visit them? As the death toll began to mount, this sentiment became increasingly palpable all over China. But the way the administration responded, it displaced puzzled grief with positive energy. Indeed, from the highest party level downwards, the concern for the affected people was clearly evident. To claim that this has anything to do with communism would be a red lie. There is nothing socialist about China today. From farmland to plasma TVs, private ownership thrives in that country. Yet, within an hour and a half of the earthquake, Premier Wen Jiabao was at the site. He stayed for days on the broken ground directing relief teams from the front. This level of empathy would put many democratic countries to shame. Where was George Bush when Hurricane Katrina whipped New Orleans? When he eventually came it was a hurried wham-bam affair. He was in and out in 24 hours and off to Palm Beach. Then prime minister Atal Bihari Vajpayee took a full five days before he visited Bhuj after an earthquake struck it in 2001. When Vajpayee, at long last, reached Bhuj, the security was so tight that it blocked relief supplies by air and by road. Within five days of the Sichuan quake, Chinese relief teams had reached all the 3,669 affected villages of the region. In Bhuj, even after a full year had passed, several villages were untouched by rehabilitation efforts. They had neither seen the front nor the back of a relief worker. This prompted affected people, such as those around Khavda and Maliya, to pick up the pieces themselves. No wonder only a tenth of urban dwellings destroyed by the quake have been restored so far. The rest continue to cantilever feeble, uncertain roofs. In China, premier Wen has vowed that new cities will be built where the old ones were destroyed. In a moving and emotionally charged statement he said that "building a new town is the best consolation for dead relatives". To keep this promise the Chinese people have reportedly raised over $16 billion already. This does not include foreign donations which, when they come in, will be small change in comparison. Our democratic credentials notwithstanding, Bhuj victims received less than $20 million from the West. America parted with only $5 million, Britain a little less, and many other European countries donated only in the thousands.

Yet we felt beholden to them simply because our state was wanting in every department. BBC estimated that the total amount dedicated for earthquake relief in Bhuj, from all quarters, was about $1 billion. This compares poorly with $16 billion already raised in China, and that too from its own people. Already 23 Chinese relief workers have lost their lives for their courage and commitment in helping trapped victims out of precarious structures. In contrast, relief efforts in Bhuj waited largely on external help and NGO support. Here too we bungled. Medecins Sans Frontieres was kept waiting for days to get clearance to come in. Doctors flew in from different parts of India, but most of them left before their patients could say "Aaah". Sensing administrative inefficiency and corruption, Gujarat's then chief minister, Keshavbhai Patel, ordered that all relief funds be channelled through NGOs. That many of these organisations worked with a communal slant in their so-called "adopted villages" did not stop the flow of money that went to them. Scores of publicity seeking volunteers took photos of themselves doing charity work while checking their profiles in the mirror for political correctness. It is true heads will roll once the dust and rubble settle in and around Sichuan. Builders who had done a shoddy job with substandard material will be put on trial. One can expect the numbers of executed people to rise above the current level of about 2,000 annually. The fact of execution may not sit well with many of us, but the point is that somebody is being held responsible and somebody is being punished. Nothing of the kind happened after the Bhuj earthquake. In that case too it was equally clear that the death count would have been much lower but for corrupt builders. Surprisingly, just six weeks before disaster struck Bhuj, the BJP-led government regularised illegal construction in six municipalities of that region. This obviously delighted the construction mafia but they were not ones inside the homes that crumbled. This then is the rehabilitation balance sheet between "democratic" India and "authoritarian" China. Does this have something to say about how democracy is understood and practised in our country? Indeed we have a number of political parties, talking shops, and intellectuals for hire and sale. But what good has all this done for the common people. SEZs are built at will, the contractor-builder-politician nexus thrives, food shortages continue, poverty levels remain stubborn, and yet we are a democratic country. Hopefully, at some point we will realise that democracy is not just about elections. It has something to do with the state delivering to the electorate as well.

(Work is keeping me busy this week, so just posting some nice articles - my take on all this will come a bit later)

Sum in the Pics............

Its me...the traditional semi urban thinking guy who likes to take the Bull by its horns......

An Absurdity called Oil Bonds

(Excellent article published in Economic Times.....Oil bonds and flawed policy of GOI)

Why can't oil companies, which are now threatening to ration sales of cooking and motor fuel in a bid to cut losses, settle their tax payments against the bonds the government issues them from time to time? Most policymakers and economists will call it bizarre and rubbish it as absurd. But the bloodbath in India's oil and gas sector is no less bizarre. However, a proposition on these lines may well be the way out for the liquidity crunch the oil companies are facing. Let cash-strapped oil companies opt for the oil bond route to settle their dues to the central exchequer. The absurdity of the current scenario plays out thus - the government imposes taxes (up to 50% plus on petrol and more than 30% on diesel) on the retail selling price of fuel. The tax increases the selling price of fuels. But the government then steps in to artificially control prices with a subsidy and to protect the consumer. This subsidy takes the form of special bonds called oil bonds, which have so far proved illiquid for the oil companies. If the oilcos were permitted to use the bonds to settle their tax dues, the subsidy would cancel out the tax receipts, bringing out the absurdity underlying the entirety of administered oil pricing.

The oil sector is the largest tax contributor to the central exchequer, paying close to Rs 70,000 crore on account of customs and excise duties. This is apart from the dividend they shell out to their owner, the government, on their profits. The same oil companies, however, are dependent on the government to remain in the black. Although, pricing of petroleum products was 'decontrolled' in April 2002 with the dismantling of the administered pricing mechanism, the government regulates prices of all major fuel at the retail level. Result: The consumer prices of motor fuels, petrol and diesel, and cooking fuels, LPG and kerosene, are way cheaper than the true market rates. This leads to huge losses for the oil companies. The government, on its part, issues bonds from time to time to compensate the oil companies for the losses they incur on sales of petroleum products at controlled prices. So on the one hand, while the oil companies are writing out cheques to meet their tax and dividend obligations, on the other, they have to be bailed out through government bonds to remain profitable. But the bonds issued by the government fail to solve the oilcos' liquidity crunch as they often have to be sold at a discount. Further, oil companies can sell only 25% of the bonds in a given quarter, thus posing huge financial challenges for the companies. Also, the bonds issued by the government have few takers in the secondary market given the yield rates . Then, the appetite for these bonds was particularly low among institutions as till recently the bonds were not SLR-eligible. Oil companies which have been totting up huge losses have managed to remain in the black thanks to the oil bonds. Losses on fuel sales have reached record levels and are expected to cross Rs 1,80,000 crore by the end of this fiscal. Absence of enough liquidity has put severe pressure on the creditworthiness of some of the companies. Take, for example, Indian Oil Corporation. Despite being a Fortune 500 company, IOC was downgraded by ICRA for its long-term credit rating to LAA from its earlier position of LAAA in November, even as credit rating agency Moody's changed the future outlook for IOC to negative from stable. A liquidity squeeze poses huge challenges for oil companies like IOC or BPCL as they depend heavily on imported crude to run their refineries. Most international oil traders or even oil companies are unwilling to open letters of credit unless the company is in a comfortable financial position

Companies would be left with more money in their hands if they are allowed to set off their tax payments against the bonds with which the government part-compensates them for their losses on retail sales. And something on these lines could well be under discussions in the corporate boardrooms. Refining companies are reported to have mooted a proposal by which they could sell their bonds to upstream oil producers like ONGC to pay off their crude purchase bills. An idea which was nipped in the bud with upstream companies rejecting outright such a proposal. Paucity of funds has already started taking a toll on the capacity building plans of the companies. Even as private sector refiners like Reliance Industries and Essar are adding huge capacities, public sector refinery companies have either put on hold their new refinery plans or are going slow. The skewed pricing policy in the petroleum sector and non-transparent way of doling out subsidies have already started deterring investors from the oil sector. At a time when global oil majors are clocking record profits, thanks to the surge in crude and product prices, Indian oil companies are only adding to their losses. Even oil producers like ONGC, who should have been raking in the moolah, are forced to fork out huge discounts, as part of the subsidy sharing formula. According to latest projections, Indian refiners and oil marketing companies could be headed towards a total subsidy bill of almost Rs 2,30,000 crore in ficsal 2008-09 if the scenario continues. All the downstream oil companies - IOC, HPCL and BPCL - have been borrowing heavily to meet their working capital requirements. While HPCL and BPCL will soon hit the borrowing ceiling, even market leader IOC is not far off. Issuing oil bonds which have a tenor of three to seven years only defers the financial liability of the government, posing huge problems for future governments. The fiscal deficit figures given out by the government thus fail to reflect the true picture as was recently cited by RBI governor Y V Reddy. Policymakers would tend to reject such an outrageous proposition. After all, revenues collected from taxes or dividends are the main source of income for the government to meet its expenses or fund social sector programmes. Globally too, revenues from oil companies have gone to fund public good projects in health, infrastructure and education. Choking out these revenue flows and settling them against bonds issued by the government may not be a sustainable economic solution. Issuing bonds with huge fiscal liabilities does not make economic sense as well.

The 10 Best Business Classes in the Sky

Sum's take on Airline Business Class Seats - Full-length beds, gourmet meals, in-flight movies, massages—today's business classes are more like flying spas but the best ones are transporting in every sense of the word
(I am often asked which airline has the best business class - here goes my reply ..)

1. Singapore Airlines
Price of a round-trip ticket: Rs.75,000*
Home base: Singapore
Notable amenities:
• Singapore Airlines' custom-designed SpaceBeds are 84 in. long and recline to an 8-degree angle
•The SpaceBeds are positioned in a 1-2-1 arrangement across the cabin
•Seats feature a four-way adjustable headrest, 10.4-in. personal monitor, and Dolby headphones with surround sound
• Singapore Airlines' in-flight entertainment system, Krisworld, offers 450 entertainment options with a 225-CD music collection
*(Fare based on round trip ticket tiket Delhi - Singapore - Delhi in Indian Rs.)

2. Cathay Pacific
Price of a round-trip ticket: Rs.80,000*
Home base: Hong Kong
Notable amenities:
• Cathay 747-400 Premium contains 39 main-deck and 26 upper-deck business-class seats, all arranged in a 2-3-2 layout across the cabin
• The Z-shaped seats have a 60-in. pitch and extend more than 75 in.
• An assortment of Asian and Western dishes are served to customers via an eye-level trolley
• Amenity-kit bags by French label Agnès B. feature products from American skin-care brands Murad or Dermalogica
*( Fare based on round trip ticket Delhi - Hong Kong - Delhi in Indian Rs.)

3. Qatar Airways
Price of a round-trip ticket: Rs.47,000*
Home base: Doha, Qatar
Notable amenities:
• 160-degree reclining seats feature independent lumbar support and a foot massage bar
• A six-course meal that includes a course of Arabic mezzas (Mediterranean tapas)
• In the near future, Qatar passengers will also be able to send and receive text messages and enjoy service from a range of satellite television stations
*(Fare based on round trip ticket Delhi - Doha - Delhi in Indian Rs.)

4. Malaysia Airlines
Price of a round-trip ticket: Rs.50,000*
Home base: Kuala Lumpur, Malaysia
Notable amenities:
• Malaysia Airlines' Golden Club Class seats feature 10.4-in. personal LCD touch-screen monitors, which offer more than 30 radio and video channels
• Each Golden Club Class seat has its own privacy shell and is electronically adjustable with preset buttons. All seats have massage features as well as an in-seat power outlet
• For those with diet restrictions, Malaysia Airlines provides special meals including Low Purine, Gluten Free, Low Calorie Meal, and Soft Meals/Bland Meals
*(Fare based on round trip ticket Delhi - Kuala Lumpur - Delhi in Indian Rs.)

5. Etihad Airways
Price of a round-trip ticket: Rs.37,000*
Home base: Abu Dhabi, United Arab Emirates
Notable amenities:
• Business-class, or Pearl Zone, passengers are offered free limousine transfer service to any destination in the UAE
• The 28 Pearl Zone seats are arranged in a 1-2-1 setup
• The 73-in. seats extend a full 180 degrees and feature a built-in massage facility
• Each Pearl Zone seat has immediate access to the aisle as well as a personal 15-in. LCD screen
*(Fare based on round trip ticket Delhi - Abu Dhabi - Delhi in Indian Rs.)

6. Air New Zealand
Price of a round-trip ticket: N.A
Home base: Auckland, New Zealand
Notable amenities:
• 79.5-in. seats that fully extend into lie-flat beds
• Personal, 10.4-in. high-resolution screens complete with in-seat remote allowing viewers to rewind and fast-forward
• A typical three-course long-haul menu includes a Manuka poached king prawns appetizer, the New Zealand lamb with horopito salt entrée, and a Coconut panna cotta for dessert
• Air New Zealand's premium bathrooms feature New Zealand's Living Nature skin-care products
*(Fare not available as Air New Zealand in not flying to India. However Interline fares with Singapore Airlines and Air India are available)

7. Thai Airways
Price of a round-trip ticket: Rs.58,000*
Home base: Bangkok, Thailand
Notable amenities:
• Business-class, or Royal Silk, passengers enjoy a separate, exclusive check-in lounge as well as access to any of the six Royal Silk lounges at Bangkok's Suvarnabhumi Airport
• Thai Airways' shell seats offer 60 in. for passengers to stretch out on seats that recline 170 degrees• Royal Silk features include electrically controlled seats and personal in-flight entertainment systems offering hundreds of channels for movies, music, information, and games
*(Fare based on round trip ticket Delhi - Bangkok - Delhi in Indian Rs.)

8. Emirates
Price of a round-trip ticket: Rs.60,000*
Home base: Dubai, United Arab Emirates
Notable amenities:
• Exclusive first- and business-class check-in at Dubai International Airport
• Emirates business-class travelers have access to the Dubai two-level business-class lounge featuring a balcony, massage chairs, and wireless network facilities
• Complimentary chauffeur service for business-class passengers
• Emirates' signature "ice" in-flight entertainment system features more than 500 channels of film, television, radio, and other forms of entertainment
*(Fare based on round trip ticket Delhi - Dubai - Delhi in Indian Rs.)

9. Virgin Atlantic
Price of a round-trip ticket: Rs.122,000*
Home base: London
Notable amenities:
• Virgin's Upper Class cabin features no more than four Upper Class Suites across the width of the cabin, making each suite aisle-accessible
• Each seat extends into a fully flat bed with a length of 79.5 in. (82 in. on the upper deck)
• Upper Class travelers can wine and dine at the Upper Class Suite's onboard bar
• On selected flights, Virgin reserves a section of the cabin for those who wish to sleep through the entire flight
*(Fare based on round trip ticket Delhi - London - Delhi in Indian Rs.)

10. British Airways
Price of a round-trip ticket: Rs.1,22,000*
Home base: London
Notable amenities:
• On British Airways' overnight flights from North America, travelers can enjoy pre-flight suppers in the airline's Terrace Lounges
• When flying from Heathrow or JFK, passengers have access to the terminals' Molton Brown Travel Spas, which include a variety of services such as shiatsu massages and body-jet hydrotherapy showers
• The World Club cabin features 6-ft. seats that recline fully flat
• Club World Sleeper Service provides reduced trolley movements and announcements, and breakfast in bed served closer to landing to maximize travelers' sleep time
*(Fare based on round trip ticket Delhi - London - Delhi in Indian Rs.)

skytrax data used

Rise in Oil Prices and a Lame Duck Government

Inability on take a call on rise in petrol and diesel prices - Lame duck Government governed by FM & PM who are guided by the Invisible hand of Madam and threatened by the Stick of Left

A cess or surcharge on income tax and corporate tax may be levied to bail out oil firms reeling under high global oil prices as Petroleum Ministry's proposal to raise petrol price by Rs 10 a litre, diesel by Rs 5 per litre and that of LPG by Rs 50 per cylinder finds few takers. The new proposal follows Finance Minister P Chidambaram's reluctance to cut duties on crude oil and petroleum products unless alternate source of revenues are identified. Petroleum Minister Murli Deora met Chidambaram today but failed to convince him of the urgency to cut import and excise duties to avoid the Rs 2,00,000 crore revenue loss expected on petrol, diesel, domestic LPG and kerosene this fiscal. BPCL and HPCL have cash to buy crude oil only till July while Indian Oil can finance imports till September. The three firms face huge liquidity crisis as they are unable to realise full value of products sold. "We don't want to see scarcity of petroleum products particularly kerosene and LPG," Deora told reporters after the meeting. "Oil companies are in a precarious state and we need urgently find solutions." Deora said some proposals were discussed but "nothing has been agreed." Sources said a cess or surcharge like the one levied after the Kargil war, may be imposed on income and corporate tax to make up for the cut in customs duty on crude oil to zero from 5 per cent and an excise duty cut on petrol and diesel. Petroleum Ministry is proposing to raise petrol price by Rs 10 a litre, diesel by Rs 5 per litre and that of LPG by Rs 50 per cylinder cut the Rs 580 crore per day loss made by the three oil firms by one-third. S Sundereshan, Additional Secretary in Petroleum Ministry said oil companies cannot wait for another week for the decision. "We are hopeful that a decision will be taken soon," he said. "The crisis needs to be defused at the earliest." Deora said some in the government want petrol prices to be deregulated, a move that may see rates being hiked by Rs 16-17 a litre, but continue subsidies on diesel. Petrol contributes has negligible weightage in inflation and so its deregulated prices moving in tandem with global prices will not lead to price hike. Diesel, on the other hand, is used by transport industry and replicating the same for the fuel would have cascading effect on inflation.

Sum's take on this - This is not only redicilous but plain lame duck approach of the Government which is often seen as being run by a proxy PM. There's been a panic world wide on rising crude prices and there has been a resultant increase in petrol and diesel prices. Indian government whose carrot of farm loan waiver has some how not been taken very well by the masses (as is evident from the results of recent elections), now wants to approach the coming lok sabha elections without angering people with any increase in fuel prices.

The underrecoveries on petroluem products amounting to Rs.200,000 crore a year are enough to finance the entire fuquirements of the rural roads , Rs.43,200 crores component of Bharat Nirman Plan, Rs.65,000 crore rural electrification plan and providing assured irrigation to millions of hectares of land which in dependent on the vagaries of monsoon. The UPA's agenda of pro poor will be better met by utilizing the Crores on these schemes than by playing the lectoral card and funding the rich, middle class with their hefty oil subsidies.

Even if petrol is deregulazed and the prices are set to be maket driven (an increase of Rs.10-15 per litre) it would not have an adverse impact on inflation numbers. Also keeping the diesel prices and keresone prices under moderate increase levels will keep the oil subsidy under check.

I am sure we are not prepared to see a situation of oil shortages in the near term, and it would not only dent India's claim of being an economic superpower but it will also not go too well with Madam's electoral population.

Its time for Madam to give some free hand to PC (Chidambaram) to run MS software (Manmohan Singh) and put things back on track with some sound programming in the final lap of UPA's governance.

Government is using the cess as a tool of drifting away from the main issues. It remains to be seen how the education cess recoveries have been spent. Duty cuts or cess are defensive measures being taken by a Government who have forgot the basics of fiscal prudence.

Sum's take on India's Fiscal Deficit Numbers

What does Reddy meant when he said Though the Centre's fiscal situation is improving, I think there are underlying fiscal pressures not evident in the numbers"

Well he actually meant a lot, athough India's fiscal deficit is estimated at 2.5 % of the GDP in 2008-09 as againt 3.1 % in the previous fiscal. If we take clever play of exclusions in these numbers an approx of Rs.75000 crore of farrm loan waver and six pay commission is excluded, so is the fertilizer subsidy of Rs.50,000 crore and oil subsidy bill of Rs.200,000 crores. Has these numbers been accounted for by PC the actual fiscal deficit would be two or three times the estimates. Also the decrease in Fiscal Deficit as compared to last year in on account of low public investment by the Government. With wooping oil and fertilizer bonds being issued by GOI the entire economy is placed on a time bomb like situation. Almost half of house hold saving is being consumed by actual fiscal deficit (and not estimsted.) These deficit numbers will be a big challenge for the next government as the numbers are already the highest in the world. Coupled with high inflation numbers and high fiscal deficit "The Economist" has rightly places India in the list of three most vulnerable developing economies of the world.

How to fix Heathrow

Do not pay a fortune to make Heathrow bigger, when it can first be made so much better

LONDON'S Heathrow is the world's busiest international airport. It handles nearly half of the passenger traffic between North America and Europe. It connects the City of London to the rest of the world. It is the fortress that guards the lucrative transatlantic business of British Airways (BA). In anticipation of this month's start of the “open skies” agreement between America and the European Union, other airlines are queuing up to fly from it too.
Yet Heathrow is also the world's most abhorred international airport. It suffers the worst flight delays and loses the most bags. Its endless security queues, rude staff and shoddy facilities plague passengers. Its owner, BAA, which also runs the two other main London airports, Gatwick and Stansted, is an object of much ridicule.

Despite the inevitable first-day glitches, the £4.3 billion ($8.5 billion) Terminal 5, which opened this week, will improve Heathrow for the 40% of passengers who fly with BA. But new terminals will not solve the real problem: a lack of runways. Heathrow has only two, which operate within a whisker of full capacity. It cannot grow to meet demand. And, when something goes wrong, small delays become big ones.
The British government thinks this frames the case for a third runway at the airport. To the fury of local residents and green campaigners—and cheers from the aviation industry—it argues that Heathrow must expand if Britain is to have the competitive hub airport it needs. A decision has been promised before the summer. It looks like being the wrong one.
Up in the air
With the closure of Hong Kong's Kai Tak a decade ago, Heathrow ranks as the airport that does most harm to people living nearby. Thanks to its westerly winds and the east-west axis of its two runways, about 2m people in West London and neighbouring towns endure noise, air pollution and the small, ever-present risk of a catastrophic accident. By relaxing operating restrictions on Heathrow's runways and adding another, BAA reckons it can raise the number of flights from today's limit of 480,000 a year to 720,000. BAA and the government think that because aircraft are getting quieter and cleaner the extra flights will be bearable. But that conclusion is disputed by the government's own watchdog, the Environment Agency.
If the environmental externalities were the only cost of expanding Heathrow, you could perhaps mitigate them by charging airlines for pollution (a good idea, anyway). However, the other reason to doubt the wisdom of letting Heathrow go on growing—the constraint on space imposed by its location in London—is less easy for the government to dispense with. Passenger-traffic forecasts suggest that, shortly after a third runway opens, in 2020, Heathrow will be full again. BAA has talked about a fourth runway, but not even the most ardent Heathrow expanders can say where it would go.
The government thinks this hell is worth it: the British economy benefits from having Heathrow as a competitive hub airport, because the more transit passengers there are—they have grown from 9% of the total in 1992 to 35% in 2004—the bigger the route network and the more valuable the airport is to Britons. But Heathrow will never be a desirable hub airport, because of where it is. It will continue to be out-gunned by Paris Charles de Gaulle, Amsterdam Schiphol and Frankfurt, all of which have twice the runway space, greater potential for expansion and better surface transport.
One alternative is to start again. Time after time in country after country, hub airports have been rebuilt farther away from city centres. In the 1970s Britain toyed with the idea of building a big new airport in the Thames estuary to the east of London. But the scheme was overtaken by economic crisis, and the stranglehold of BAA and BA, both of which have a lot invested in Heathrow, has prevented its revival.
A new airport may yet be needed. But, in the meantime, there are ways of making Heathrow better. It is crowded because it is too cheap for airlines to use and because BAA has been encouraged to stuff it full of transit and leisure passengers who it hopes will spend money in its shops. Business travellers, who generate the most value for the wider economy, account for only a third of the airport's passengers.
This suggests a better solution to the overcrowding. First, the price for using Heathrow should reflect the value and scarcity of its capacity. Second, any new capacity should be built at London's other airports. And, third, these airports should be set free to compete with Heathrow by breaking up BAA.
Higher charges would drive transit passengers to the hubs in continental Europe. That would be no great loss. Although transit passengers help BA and BAA, they do little for Britain's economy. If the route network shrinks, the least-useful routes go first. In any case, because lots of people want to fly to and from London, transit passengers are less crucial to maintaining Heathrow's route network than the government thinks.
Competition between Heathrow, Gatwick and Stansted would help too. Stansted, with a second runway, would suck in leisure traffic. The new owner of Gatwick, much better placed to grow than Heathrow, would have good reason to build a second runway after 2019 (when an old planning agreement expires), with the aim of attracting one of the big airline alliances—and thus becoming a hub itself.
Slowly does it
Such changes call for an overhaul of the way Britain runs air travel. At present, the landing charges for Heathrow and Gatwick are fixed by the Civil Aviation Authority, which juggles desire for low prices with the need for BAA to invest and make money. It should be told to think instead about charging a full price for using Heathrow, and the resulting excess profits at BAA should be taxed. The incumbent airlines, the big losers, would have to accept that their slots would be worth less and that they would pay more (which is one reason to phase in the change), but their passengers would gain a functioning airport. It is time for the British government to realise that it is not its job to be the champion of the aviation industry.

Alitalia on Sale !

Why Milan resists any sale of Alitalia to Air France-KLM
ITALIAN taxpayers learnt on April 22nd that they had just lent €7.50 ($12) each to a near-bankrupt company. The outgoing centre-left government nodded through a loan of €300m to Italy's national flag-carrier, Alitalia, which is debt-laden and losing €1m a day. Normal business criteria have rarely mattered for Alitalia. But this time such considerations have been entirely blown away by the Italian election. The future of Alitalia will now be settled by politics, and maybe diplomacy. It presents Silvio Berlusconi, the prime minister-elect, with his first big challenge. And it constitutes an early test of his commitment to economic liberalism.
Romano Prodi, who will remain Italy's prime minister until early May, convened his cabinet after Air France-KLM, the only firm ready to buy Alitalia, withdrew its bid. It gave no reasons, but they are not hard to guess. Two conditions for the bid were approval by trade unions and by the incoming government. Air France-KLM secured neither. Talks with the unions broke down on April 2nd. One reason was that Mr Berlusconi had already called the bid “offensive” and announced an alternative deal with a consortium that would guarantee the airline's italianita.

His opponents accuse him of dreaming up a non-existent counter-offer so as to play the nationalist card in the election. He insists that there are interested investors, but that they need time to prepare an offer. And since Alitalia is running out of cash (at the end of March, it had only €170m in the kitty), a loan was essential.
Mr Prodi was only too happy to extend one. It dumps the question of Alitalia's future squarely into Mr Berlusconi's lap (although it may fall to Mr Prodi to persuade a sceptical European Commission that a loan to an otherwise insolvent company does not constitute illegal state aid). The outgoing government had contemplated a sum of, at most, €150m. But the loan was doubled at Mr Berlusconi's request.
Mr Berlusconi has dressed up his intervention in terms of national self-respect. Even after the election, when his attitude to Air France-KLM had mellowed, he was demanding that they agree to a new, three-country airline with Italy at the top table. One possible counter-offer may come from Moscow, where Aeroflot said it was awaiting proposals from Italy following an “instruction” by President Vladimir Putin. Mr Putin met Mr Berlusconi at his villa in Sardinia on April 17th.
In the background is a tangle of interests. Air France-KLM wanted to put Alitalia's only hub at Rome's Fiumicino airport, shedding its commitment to Milan's Malpensa. On March 31st, anticipating a change of ownership, the airline scrapped 886 of its 1,238 weekly flights from Malpensa. But the move is contested by businessmen in Lombardy, the region round Milan from which Mr Berlusconi himself springs. Antonio Colombo, director-general of the employers' federation, Assolombarda, notes that Lombardy accounts for 30% of Italy's exports. The shift to Fiumicino has meant losing flights to such places as Dubai, Mumbai and Shanghai.
“Save Malpensa” also became an electoral battle-cry for the Northern League, which handily increased its vote in the election and could yet hold the Berlusconi government to ransom. The League's leader, Umberto Bossi, is already flexing his muscles. This week he claimed (and Mr Berlusconi promptly denied) that he had secured for his party a deputy prime-ministership and the interior ministry in the next cabinet.
Mr Colombo says that the real objection to Air France-KLM's bid was that it bound the government to respect bilateral accords with countries outside Europe's “open skies” agreement. “That meant there was no possibility of other companies filling the gaps left at Malpensa by Alitalia.” Without direct links to countries such as India and China, Milan's attractiveness as a business centre would suffer. So would its role as an exhibition venue, an irony since it has just won the contest to host the World Expo in 2015. Alitalia's italianita is not the only national interest at stake in this saga.

Subsidy on Crude (Economic Times perspective)

Just one day after I wrote my blog...economists time point of view seem to be gelling with mine... Go Subsidy Go ! ! !

With international crude prices crossing $135/barrel and the indian crude basket following closely at $125/barrel, the under-recovery or the subsidy on petroleum products is likely to touch Rs 180,000 crore in 2008-09. At a consumption poverty level of 27.5%, this amount is sufficient to provide every person below the poverty line an annual income support of about Rs 6,000.
More relevant from a long-term perspective, a single year’s subsidy on petroleum products can cover the entire funds requirement of the rural roads (Rs 43,200 crore) component of the government’s ambitious Bharat Nirman, meet the Rs 65,000 crore needed for the electrification of 125,000 unelectrified villages under the Rajiv Gandhi Gramin Vidyutikaran Yojana, and still leave enough to bring about eight million additional hectares under irrigation. Needless to say, all these investments would directly or indirectly benefit the relatively deprived sections in India, namely the rural masses. In contrast, look at the beneficiaries of the subsidy. The subsidy on petrol, about 10% of the total, goes mostly to car and two-wheeler owners, together about 30% of all households. The relatively poor 70% households have no stake in petrol subsidy. Nearly 40% of the subsidy on cooking gas, according to a TERI paper, goes to the top 6.75% of the population. As for kerosene, 40% of it goes into adulteration, benefiting relatively better-off dealers. Diesel, which accounts for the bulk of under-recoveries, could be benefiting the relatively deprived only inasmuch as it is used in public transport. But a large portion of it is likely going into captive power generation or private transport, again the undeserving. This is the state of affairs even as the government does not tire of talking about the poor; when it survives on the support of the Left, which again claims to represent the deprived. The government has frittered away in just about a year the fiscal health built over many years. It is leaving a huge burden for coming governments in the form of off-budget liabilities such as fertiliser and oil bonds. And in its desperate fight against inflation it has reversed the clock on many reforms. The least it can do now is to stop pampering the relatively better-off and raise petroleum product prices, at least that of petrol and LPG.

De Addiction Tourism - "Newest form of tourism"

(Economic Times article on the concept of de addiction tourism)

Move over dope, alcohol and rave parties, Gen Y from India Inc is on a trail of nature. For those who believe that narcotics and liquor have got enough of them, de-addiction tourism is the new fixation. Now, a beach house overlooking the vast Arabian Sea off Vasai coast in Mumbai, houseboats nestled in the backwaters of Kerala and various cottages in the Himalayan valleys have become destinations for them to reckon as they opt for de-addiction. While there are close to 400 de-addiction centres across India, the marriage of tourism with de-addiction has been drawing Gen Y to the hospitality sector. Not just Indians, even foreigners with drug abuse problems have been thronging these destinations to get a flavour of Indian tourism as they get treated across exotic locales of the country, says corporate general manager of Cochin-based Spice Land Holidays Madhu KG. Having launched the de-addiction tourism package in the recently held Arabian Travel Mart in Dubai, Spice Land offers addicts and their families a host of locales across the God's Own Country to choose from while an accompanying therapist takes care of de-addiction. Combining medication with meditation as one spends quality time amid tea gardens, backwaters or wilderness is not just an experiment of sorts - it transforms a person completely, Mr Madhu points out. Charging Rs 2 lakh for customised packages that could last from one week to one month, the company is targeting to tap not just Indians but also those with substance abuse problems in Europe, US and Africa.

Likewise, a little distance from Mumbai in Vasai, a beach house has been converted into a rehab centre exclusively for India Inc. Lifestyle - Detox and Rehab Centre is not a typical gloomy rehab centre that keeps off the affluent. Two kilometres from the sea, the centre offers single and double occupancy air-conditioned rooms with attached baths, European and Indian meals, swimming pool, ayurveda massage parlor, meditation and yoga centre to ensure a comfort stay of visitors. As an add on, a chauffeur-driven car drives one to this remote location from the Mumbai airport, says director of Lifestyle Sagar Utagi. Offering a full range of bio-psycho-social treatment services from detoxification right through to aftercare, the centre is attending to high-end clients from Goa, New Delhi, North East, South East Asia and Europe. For one week of detoxification programme and three weeks of rehabilitation, the one-month package costs one Rs 30,000. "We felt the need to cater to the high-end clients who otherwise seek treatment in US or Europe and hence, we created this facility to suit their taste buds while offering them treatment the very best of western-evidence based treatment with Indian traditional approaches such as ayurveda medicine, yoga and nature therapy," Mr Utagi tells ET. In neighbouring Pune, Muktangan Deaddiction Centre has expanded its horizon and taken into its fold big corporates in Western India under its de-addiction programmes. "We have extended our services to corporates to ensure prevention, reduction and management of substance abuse at work place," says liaison officer (corporate services) Muktangan Mitra Sanjay Bhagat. Meanwhile, close to the BPO capital of the country in Mysore, Indus Valley Ayurvedic Centre has been attracting corporates, young executives from IT and ITeS sectors.

Whats happening with world's crude'

(Sum's perspective on Crude prices and wats the way forward)

In Jan 2007 crude at around USD50 a barrel was a cause of concern although US led by a bouyant world economy was booming at that stage. Exactly a year and a few months later we are witnessing crude at USD 135 levels (a barrel) and it dosent seem to be cooling off any soon. Lets first see whats happening with world crude production levels. Saudis' the homeground of world crude production is more concerned about preserving crude for future generation and is reluctant to increase production beyond particular levels (even if it means saying a no to Bush's requests). Another cruicial reason here is there no spare capacity outside Saudis. Iran is in the midst of sanctions and Iraqi's supplies are now where near their pre invasion era. Though US is trying its best for restoring normalcy to Iraqi wells it still has a long way to go. Some other oil producers like Nigeria is busy with infighting and domestic issues which might affect its supplies. Venezuela nationalization and adamancy does not augur well for world oil production and increased supplies. The largest increase in world's oil production outside OPEC comes from Russia and of late its oil supplies too have been dwindling. US in its homebase of Alaska wants to play the environment card and in light of declaring Polar Bear an endangered species has baanned any chances of oil exploration/ production from the Alaskas. There is a forecast of a hurricane season looming large over Americas and Mexico and it might have a bearing on off shore oil exploration and production.

Add to the dwindled supply story an increased demand of oil from BRIC countires and some other developing nations where the government is subsidizing oil for its masses, youve got a perfect plot for a bleak future. In India the oil subsidy bill is close Rs 200,000 crore a year and the Government (approaching some crucial elections this year) still is hesitating to take a call on increase in prices fearing backlash in elections. This has made an artificial mismatch between demand and supply, as the supply is definitely at the increased levels whereas the demand is buoyant on account of oil subsidy cushion. A majority of India population still manages with less than Rs.50 a day whereas an approx subsidy of Rs.100 a day for a car owner is wasted. Oil Minister wants an increase of Rs.10 per litre of petrol to at least cover up some of the under recoveries of oil companies. In a vast democracy like India elections will come and go , but Governments have to take some tough decisions and move towards a low subsidy route atleast in oil, as the benefit of oil subsidy is enjoyed more by the rich and affluent than by the poor. Consider this the annual oil subsidy bill is Rs 200,000 crorecompared to an annaual outlay of Rs 16000 for rural employment guarantee program.

Better would be to have a long term policy on oil devoid of any political motives. An reduction in oil subsidy will definitely spike up the prices affecting prices of all essential commodities (in lieu of increased transport cost). Government can look to offset this by providing increased support to the weaker section. Strengthening the PDS system and support base of all other essential goods and services for poor section will help. As for middle class and rich there will be an automatic adjustment in demand for oil, there will be increased reliance on public transport and private transport which is now flauted by one and all will be a luxury of sorts. There will be less traffic on roads and some kind of environonment protection too. Government in such a sceneraio has to provide a strong set up of public transport to prevent a system breakdown. The amount saved on account of reduction in oil subsidy can be diverted to strengthening of public transport and infrastructure. This is an enevitable call and government has to act maturely to make oil pricing market and demand driven.

If India is to maintain its core competency in future it has to start thing about sustainable environment planning today. Government must earmark some areas in every city as no private vehicle zone and commuting here must be through public transport only. Public transport and pooling system of commuting should be encouraged. Though India is surplus in food grain production, (assuming all other things constant) it must divert its maximum attention of developing and maximum usage of bio fuels.

The 123 aggreement with US could be a step forward in increasing reliance on renewable sources of energy unless the Left comes out with its own Bio Fuel.....explored, produced and marketed directly from Bengal.

Lets all just make a small contribution by changing our oil usage patterns. We can earmark some days for not using our vehicles (use the public transport or bicycles or put on the walking shoes instead). We can try and go to our workplace with shared means of transport. Its still early to put a break on our globe trottering but companies can try and rely more on video conferencing, just imagine just by one video conference you are reducing usage of oil on car, air plane fuel, hotel resources (water, drainage, enegry etc). Even "staycation" (spending vacations at home) instead of vacation can be buzzword in near future if we dont mend our oil and energy spending habbits 'Today".

IPL Dream Team (Sum's Pick)

Its time for Sum to turn a franchise owner and pick up his dream team from the current batch of jokers..(oh noo sorry...current batch of cricketers)......

Franchise Name - "CRAFTSMEN"
Franchise Owners - Sum (who else...)
Franchise Slogan - Chak De !
CEO - (luking for one.....u guys can apply)
Coach - Greg Chappel (still feels his innovation & experimentation can come handy)
Cheerleaders - Rakhi Sawant, Mallika Sherawat, Bipasha Basu, Mallika Arora Khan, SRK and Priety, Vijay Mallaya, Mukesh Ambani.....(can we have Ash in here too......?)

Playing Eleven

1. Sanath Jayasuria (he is on a blast ...leading with his sixes)
2. Virender Sehwag ("on my day, no one can overcome"....this is how viru puts it)
3. Shaun Marsh (cool as a cucumbur and very very consistant)
3. Gautam Gambhir (yaaar orange cap owner.....hai gotto have him)
4. Rohit Sharma (future captaincy material ...for india )
5. Shane Watson (foreign flurry.....good alrounder to have)
6. Mahinder Singh Dhoni (captain cool....good motivator too)
7. Irfan Pathan (he's been consistant and can bat too)
8. Shane Warne (Captain of this team.....he's role assignment of team and leadership excels)
9. Shreesanth (oh yeah need some guys sheading some tears too)
10. Manpreet Gony (talk lanky fast )
11. RP Singh (He's been in a loosing side, but with wickets)

Extra's in the dug out

1. Ishant Sharma/ Zaheer Khan (Express fast bowlers)
2. Mc Grath (Old wine....)
3. Amit Mishra (hatrick man)
4. Yousuf Pathan (brother in arms....he can hit a big way)
5. Shaun Paulock (he's been good with bat and ball)
6. Adam Gilchrist (he's been captaining a loosssing side...but batting still looks good)
7. Yuvraj Singh (yuvi is one the most elegant lefties around)

Beware BPO's.. "Nearshoring" is catching up in US (Sum's Perspective)

Nearshoring always existed. US shipped jobs to Canada, UK to Ireland and alike, taking a note from Indian success story some lesser known economies are trying to recreate the magic in Americas by luring the US to Nearshore rather than Offshore. Guatamala, Mexico, Venezuela are some of the countries US companies are looking to ship some jobs. There is an advantage of cultural similarities, bilingual and predominantly english speaking population, availability of cheap workforce and cheap property rentals. The cultural affinity of countires like Guatemala with US is a big enabler to provide high quality service.Increasing salaries and skyrocketting property prices are eroding the low cost advantage available with India.

Nearshoring in a Sunrise sector for the above said countires and the companies face a challenge of starting from scratch, indentifying and training workforce being the biggest challenge. Trained workforce, talent development, establish business practices and a seamless delivery mechanism seem to be the biggest challenges.

Whether the hispanic and bilingual communities are able to grasp this opoortunity and grab the initiative from India remains to be seen. The current report card still seem to give a thumbs up to Indian BPO industry for their operational efficiency despite leakeges of information and lapses at gives times. Time to put the industry on full throttle ...huh ?

Foodies Delight - Sum's take on Best in Town (Chandigarh)

This is my take on best food in town...where and how ? (Chandigarh and around...)

Masala dosa - ISBT 17 Chef (dont forget to ask for their special tomato sauce)

Dosas (Masala, veg, cheese, egg), Idlis, Vadas - Indian Coffee House, 17 (very traditional, waiters still wear those white dresses and take bills out of their pockets)

Dahi Bhalla - Sagar Ratna, 17 (luv those green chillies on top)

Chinese Soups - Shangri La, Mohali (donn knw the phase and sec, but ther'z only one shangi in mohali). Also try at Chinese restaurant at Purple floor of Shivalik View. Excellent view of Chandigarh Greens. Must try Degchi in Sec 8 market. Just sit in your car in the parking and honk, one of the waiters will greet you.

Dimsums / Momos' - Yo China, Sec 9 serves good ones. Though i like of Sandhya's in rehri market, sec 7 panchkula. (Try some local small shops in Dharamshala, HP if you happen to go there, they serve excellent mutton momo's)

Chinese Combos' - Yo China again ....Try Schenezwen and Hong Kong chicken combo with rice. Shangri La sec 35 serves yummy American Choupsey.

Maggii - (where does this come from) - Head to MOCHA sec 26, they serve different variants of Maggii, though it burns a hole in your pocket. Enjoy longue attitude and dont forget there flavoured Hukkas...

Paranthas' - Rehri at sec 16 (just outside general hospital 16, opp sec 10). Catch here is that u can catch this guy from 10 pm to 5 am only. Also for all u, cigg buffs, u can get ur stock here all night long. enjoy alloo ka parantha or egg ka parantha.

Tea...(yes chai..) - Ask anyone in Sec 17 and he will vouch for Sethi ki Chai...near CMC, compliment it with bread pakora or samosa.

Amritsari Kulcha - a shop in sec 9 panchkula market. serves alloo, gobi and paneer kulcha with chane and chutney. (beware - owner is a short tempered guy) and yes dont forget to catch a glass of sweet lassi from vijay diary along side.

Alloo Puri/ Chane Bhature - Sindhi Sindhi Sindhi Sindhi Sindhi @ 17

Pastas - Try Manor 26 or Noodle bar 26 (pennee arbarita is gud).

Thai Food - Noddle Bar 26 or Purple Rice 35 (near hotel heritage)

Mexican - HM's salad bar (try their spicy variants)

Chicken Lollypops - HM's Down 17 under or Blue Ice 17

Chicken Frankie / Kathi Rolls - Hot Stopper 17

Golgappee, chat, tikki - Sec 23 market, sec 17 panchkula, Gopal's is not bad at all (though u have to help ur self here). Must try in ambala (dont knw the bazaar's name ...they serve 7 different variants of paani with golgappee...)

Milk shakes - Sec 10 market (u can mango shake all year around, chocolate and banana shake are good too)

Rajma Chawal - Sweet shop in sec 8 market, chd (just next to degchi) serves good samosas too

Samosas - Sec 8 sweet shop (in the market next to degchi... try wid chane), sweet shop in anand theater complex 17 and muskan 17 serves good ones too.

Chiken Tikka - A rehri along sec 16 petrol pump, panchkula.

Butter / Karahi Chicken- Ghazal 17 and Chawals 8

Chicken seekh kabab butter masala - Mehfil 17

Roasted Chicken - Tehal Singh's 22

Chicken Curry and Keema Kalegi - Pal ka dhaba sec 27

Mutton curry - the dhabha next to pal ka dhaba sec 27

Sarson ka saag makki ki roti - Saini ka dhabha, Pinjore

Indian Khana - Ghazal 17 or Yellow chilli 9 panchkula (must try mushroom chiili of ghazals 17 and green chilli veg of yello chilli)

Fast wali thali - Sindhis and Sagar Ratnas...though sagar ratnas is more filling

Brownies - Try sizzling hot brownie @ cafe coffee day manimajra (gud ambience too) or pick up a brownie from monicas 8 or nick bakers 9

Chocolate balls with Vodka and tequila shots - Nick Bakers 9 and 35

Cakes and Pasteries - Nick bakers 9, monicas 8

Patties and buns - Polka 34

Burgers - Veg Burger - HM 2 , Non Veg - Mc Donnalds or KFC 9

Chane Kulche - Try any of the pateela wala roaming around, one in sec 17 market near cmc is very good. some of them make bun chane...which is good too.

Curry Chawal - Sindhis17 again...

Paneer or Keema naan - Ambrozia @ Chandigarh club

Coffee - I personally like bate wali coffee served in a steel glass at Sagar Ratna

Lemon Rice - Sagar Ratna 17

Pao Bhaaji - Sagar Ratna 17 again

Fish Fry - Sec 35 ahata....or a small shop in manimajra market. Must try eatwell in Jalandhar

Kulfi - u have to go a bit faar and try Ishaar at Kalka

Rasmalai - Sindhis @ 17

Fruit Cream - Gopals 8

Pizzas - Pizza Hut (though i personally like fresh base pizzas ...but no one in chd serves these)

Garlic Bread - Toss up between pizza hut and dominoz

Sandwiches - HM2 serves good veg sandwiches, also try smokin joes sandwiches.

Neembu Paani - Koolers 17

(list goes on......luking for more specialist food junctions...will keep all updated)

Carbon Credits

(Its too much in the news these days, gotto know what exactly is CC)

Carbon credits are a key component of national and international emissions trading schemes that have been implemented to mitigate global warming. They provide a way to reduce greenhouse effect emissions on an industrial scale by capping total annual emissions and letting the market assign a monetary value to any shortfall through trading. Credits can be exchanged between businesses or bought and sold in international markets at the prevailing market price. Credits can be used to finance carbon reduction schemes between trading partners and around the world.

There are also many companies that sell carbon credits to commercial and individual customers who are interested in lowering their carbon footprint on a voluntary basis. These carbon offsetters purchase the credits from an investment fund or a carbon development company that has aggregated the credits from individual projects. The quality of the credits is based in part on the validation process and sophistication of the fund or development company that acted as the sponsor to the carbon project. This is reflected in their price; voluntary units typically have less value than the units sold through the rigorously-validated Clean Development Mechanism

Background
Burning of fossil fuels is a major source of industrial greenhouse gas emissions, especially for power, cement, steel, textile, and fertilizer industries. The major greenhouse gases emitted by these industries are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons (HFCs), etc, which all increase the atmosphere's ability to trap infrared energy and thus affect the climate.
The concept of carbon credits came into existence as a result of increasing awareness of the need for controlling emissions. The IPCC has observed that:

Policies that provide a real or implicit price of carbon could create incentives for producers and consumers to significantly invest in low-GHG products, technologies and processes. Such policies could include economic instruments, government funding and regulation, while noting that a tradable permit system is one of the policy instruments that has been shown to be environmentally effective in the industrial sector, as long as there are reasonable levels of predictability over the initial allocation mechanism and long-term price.

The mechanism was formalized in the Kyoto Protocol, an international agreement between more than 170 countries, and the market mechanisms were agreed through the subsequent Marrakesh Accords The mechanism adopted was similar to the successful US Acid Rain Program to reduce some industrial pollutants.

Emission allowances
The Protocol agreed 'caps' or quotas on the maximum amount of Greenhouse gases for developed and developing countries. In turn these countries set quotas on the emissions of installations run by local business and other organizations, generically termed 'operators'. Countries manage this through their own national 'registries', which are required to be validated and monitored for compliance by the UNFCCC. Each operator has an allowance of credits, where each unit gives the owner the right to emit one metric tonne of carbon dioxide or other equivalent greenhouse gas. Operators that have not used up their quotas can sell their unused allowances as carbon credits, while businesses that are about to exceed their quotas can buy the extra allowances as credits, privately or on the open market. As demand for energy grows over time, the total emissions must still stay within the cap, but it allows industry some flexibility and predictability in its planning to accommodate this.
By permitting allowances to be bought and sold, an operator can seek out the most cost-effective way of reducing its emissions, either by investing in 'cleaner' machinery and practices or by purchasing emissions from another operator who already has excess 'capacity'.
Since 2005, the Kyoto mechanism has been adopted for CO2 trading by all the countries within the European Union under its European Trading Scheme (EU ETS) with the European Commission as its validating authorityFrom 2008, EU participants must link with the other developed countries who ratified Annex I of the protocol, and trade the six most significant anthropogenic greenhouse gases. In the United States, which has not ratified Kyoto, and Australia, whose ratification came into force in March 2008, similar schemes are being considered.

Kyoto's 'Flexible mechanisms'
A credit can be an emissions allowance which was originally allocated or auctioned by the national administrators of a cap-and-trade program, or it can be an offset of emissions. Such offsetting and mitigating activities can occur in any developing country which has ratified the Kyoto Protocol, and has a national agreement in place to validate its carbon project through one of the UNFCCC's approved mechanisms. Once approved, these units are termed Certified Emission Reductions, or CERs. The Protocol allows these projects to be constructed and credited in advance of the Kyoto trading period.
The Kyoto Protocol provides for three mechanisms that enable countries or operators in developed countries to acquire greenhouse gas reduction credits
Under Joint Implementation (JI) a developed country with relatively high costs of domestic greenhouse reduction would set up a project in another developed country.
Under the Clean Development Mechanism (CDM) a developed country can 'sponsor' a greenhouse gas reduction project in a developing country where the cost of greenhouse gas reduction project activities is usually much lower, but the atmospheric effect is globally equivalent. The developed country would be given credits for meeting its emission reduction targets, while the developing country would receive the capital investment and clean technology or beneficial change in land use.
Under International Emissions Trading (IET) countries can trade in the international carbon credit market to cover their shortfall in allowances. Countries with surplus credits can sell them to countries with capped emission commitments under the Kyoto Protocol.
These carbon projects can be created by a national government or by an operator within the country. In reality, most of the transactions are not performed by national governments directly, but by operators who have been set quotas by their country.

Emission markets
For trading purposes, one allowance or CER is considered equivalent to one metric tonne of CO2 emissions. These allowances can be sold privately or in the international market at the prevailing market price. These trade and settle internationally and hence allow allowances to be transferred between countries. Each international transfer is validated by the UNFCCC. Each transfer of ownership within the European Union is additionally validated by the European Commission.
Climate exchanges have been established to provide a spot market in allowances, as well as futures and options market to help discover a market price and maintain liquidity. Carbon prices are normally quoted in Euros per tonne of carbon dioxide or its equivalent (CO2e). Other greenhouse gasses can also be traded, but are quoted as standard multiples of carbon dioxide with respect to their global warming potential. These features reduce the quota's financial impact on business, while ensuring that the quotas are met at a national and international level.
Currently there are at least six exchanges trading in carbon allowances: the Chicago Climate Exchange, European Climate Exchange, Nord Pool, PowerNext, Multi Commodity Exchange and National Commodity and Derivatives Exchange. Recently, NordPool listed a contract to trade offsets generated by a CDM carbon project called Certified Emission Reductions (CERs). Many companies now engage in emissions abatement, offsetting, and sequestration programs to generate credits that can be sold on.
Managing emissions is one of the fastest-growing segments in financial services in the City of London with a market now worth about €30 billion, but which could grow to €1 trillion within a decade. Louis Redshaw, head of environmental markets at Barclays Capital predicts that "Carbon will be the world's biggest commodity market, and it could become the world's biggest market overall."

Setting a market price for carbon
Unchecked, energy use and hence emission levels are predicted to keep rising over time. Thus the number of companies needing to buy credits will increase, and the rules of supply and demand will push up the market price, encouraging more groups to undertake environmentally friendly activities that create carbon credits to sell.
An individual allowance, such as a Kyoto Assigned Amount Unit (AAU) or its near-equivalent European Union Allowance (EUA), may have a different market value to an offset such as a CER. This is due to the lack of a developed secondary market for CERs, a lack of homegeneity between projects which causes difficulty in pricing, as well as questions due to the principle of supplementarity and its lifetime. Additionally, offsets generated by a carbon project under the Clean Development Mechanism are potentially limited in value because operators in the EU ETS are restricted as to what percentage of their allowance can be met through these flexible mechanisms.

How buying carbon credits can reduce emissions

Carbon credits create a market for reducing greenhouse emissions by giving a monetary value to the cost of polluting the air. Emissions become an internal cost of doing business and are visible on the balance sheet alongside raw materials and other liabilities or assets.
By way of example, consider a business that owns a factory putting out 100,000 tonnes of greenhouse gas emissions in a year. Its government is an Annex I country that enacts a law to limit the emissions that the business can produce. So the factory is given a quota of say 80,000 tonnes per year. The factory either reduces its emissions to 80,000 tonnes or is required to purchase carbon credits to offset the excess.
After costing up alternatives the business may decide that it is uneconomical or infeasible to invest in new machinery for that year. Instead it may choose to buy carbon credits on the open market from organizations that have been approved as being able to sell legitimate carbon credits.
One seller might be a company that will offer to offset emissions through a project in the developing world, such as recovering methane from a swine farm to feed a power station that previously would use fossil fuel. So although the factory continues to emit gases, it would pay another group to reduce the equivalent of 20,000 tonnes of carbon dioxide emissions from the atmosphere for that year.
Another seller may have already invested in new low-emission machinery and have a surplus of allowances as a result. The factory could make up for its emissions by buying 20,000 tonnes of allowances from them. The cost of the seller's new machinery would be subsidized by the sale of allowances. Both the buyer and the seller would submit accounts for their emissions to prove that their allowances were met correctly.

Credits versus taxes
Credits were chosen by the signatories to the Kyoto Protocol as an alternative to Carbon taxes. A criticism of tax-raising schemes is that they are frequently not hypothecated, and so some or all of the taxation raised by a government may be applied inefficiently or not used to benefit the environment.
By treating emissions as a market commodity it becomes easier for business to understand and manage their activities, while economists and traders can attempt to predict future pricing using well understood market theories. Thus the main advantages of a tradable carbon credit over a carbon tax are:
the price is more likely to be perceived as fair by those paying it, as the cost of carbon is set by the market, and not by politicians. Investors in credits have more control over their own costs.
the flexible mechanisms of the Kyoto Protocol ensure that all investment goes into genuine sustainable carbon reduction schemes, through its internationally-agreed validation process.

Creating Real Carbon Credits
The principle of Supplementarity within the Kyoto Protocol means that internal abatement of emissions should take precedence before a country buys in carbon credits. However it also established the Clean Development Mechanism as a Flexible Mechanism by which capped entities could develop real, measurable, permanent emissions reductions voluntarily in sectors outside the cap. Many criticisms of carbon credits stem from the fact that establishing that an emission of CO2-equivalent greenhouse gas has truly been reduced involves a complex process. This process has evolved as the concept of a carbon project has been refined over the past 10 years.
The first step in determining whether or not a carbon project has legitimately led to the reduction of real, measurable, permanent emissions is understanding the CDM methodology process. This is the process by which project sponsors submit, through a Designated Operational Entity (DOE), their concepts for emissions reduction creation. The CDM Executive Board, with the CDM Methodology Panel and their expert advisors, review each project and decide how and if they do indeed result in reductions that are additional

Additionality and Its Importance
It is also important for any carbon credit (offset) to prove a concept called additionality. Additionality is a term used by Kyoto's Clean Development Mechanism to describe the fact that a carbon dioxide reduction project (carbon project) would not have occurred had it not been for concern for the mitigation of climate change. More succinctly, a project that has proven additionality is a beyond-business-as-usual project.
It is generally agreed that voluntary carbon offset projects must also prove additionality in order to ensure the legitimacy of the environmental stewardship claims resulting from the retirement of the carbon credit (offset). According the World Resources Institute/World Business Council for Sustainable Development (WRI/WBCSD) : "GHG emission trading programs operate by capping the emissions of a fixed number of individual facilities or sources. Under these programs, tradable 'offset credits' are issued for project-based GHG reductions that occur at sources not covered by the program. Each offset credit allows facilities whose emissions are capped to emit more, in direct proportion to the GHG reductions represented by the credit. The idea is to achieve a zero net increase in GHG emissions, because each tonne of increased emissions is 'offset' by project-based GHG reductions. The difficulty is that many projects that reduce GHG emissions (relative to historical levels) would happen regardless of the existence of a GHG program and without any concern for climate change mitigation. If a project 'would have happened anyway,' then issuing offset credits for its GHG reductions will actually allow a positive net increase in GHG emissions, undermining the emissions target of the GHG program. Additionality is thus critical to the success and integrity of GHG programs that recognize project-based GHG reductions."

Criticisms
Environmental restrictions and activities have traditionally been imposed on businesses through regulation. Many people were, and still are, uneasy at the use of a novel market-based approach to managing emissions, although the concept of Cap and Trade eventually won the day in international negotiations.
The Kyoto mechanism is the only internationally-agreed mechanism for regulating carbon credit activities, and, crucially, includes checks for additionality and overall effectiveness. Its supporting organisation, the UNFCCC, is the only organisation with a global mandate on the overall effectiveness of emission control systems, although enforcement of decisions relies on national co-operation. The Kyoto trading period only applies for five years between 2008 and 2012. The first phase of the EU ETS system started before then, and is expected to continue in a third phase afterwards, and may co-ordinate with whatever is internationally-agreed at but there is general uncertainty as to what will be agreed in Post-Kyoto Protocol negotiations on greenhouse gas emissions. As business investment often operates over decades, this adds risk and uncertainty to their plans. As several countries responsible for a large proportion of global emissions (notably USA, Australia, China and India) have avoided mandatory caps, this also means that businesses in capped countries may perceive themselves to be working at a competitive disadvantage against those in uncapped countries as they are now paying for their carbon costs directly.
A key concept behind the cap and trade system is that national quotas should be chosen to represent genuine and meaningful reductions in national output of emissions. Not only does this ensure that overall emissions are reduced but also that the costs of emissions trading are carried fairly across all parties to the trading system. However, governments of capped countries may seek to unilaterally weaken their commitments, as evidenced by the 2006 and 2007 National Allocation Plans for several countries in the EU ETS, which were submitted late and then were initially rejected by the European Commission for being too lax
A question has been raised over the grandfathering of allowances. Countries within the EU ETS have granted their incumbent businesses most or all of their allowances for free. This can sometimes be perceived as a protectionist obstacle to new entrants into their markets. There have also been accusations of power generators getting a 'windfall' profit by passing on these emissions 'charges' to their customers As the EU ETS moves into its second phase and joins up with Kyoto, it seems likely that these problems will be reduced as more allowances will be auctioned.
Establishing a meaningful offset project is complex: voluntary offsetting activities outside the CDM mechanism are effectively unregulated and there have been criticisms of offsetting in these unregulated activities. This particularly applies to some voluntary corporate schemes in uncapped countries and for some personal carbon offsetting schemes.
There have also been concerns raised over the validation of CDM credits. One concern has related to the accurate assessment of additionality. Others relate to the effort and time taken to get a project approved. Questions may also be raised about the validation of the effectiveness of some projects; it appears that many projects do not achieve the expected benefit after they have been audited, and the CDM board can only approve a lower amount of CER credits. For example, it may take longer to roll out a project than originally planned, or an afforestation project may be reduced by disease or fire. For these reasons some countries place additional restrictions on their local implementations and will not allow credits for some types of carbon sink activity, such as forestry or land use projects

What the heck is Sustainable Tourism ?

What the heck is Sustainable tourism ?

Sustainable tourism in its purest sense, is an industry committed to making a low impact on the natural environment and local culture, while helping to generate income and employment for locals.
Global economists forecast continuing international tourism growth, ranging between three and six percent annually, depending on the location. As one of the world's largest and fastest growing industries, this continuous growth will place great stress on remaining biologically diverse habitats and indigenous cultures, which are often used to support mass tourism. Tourists who promote sustainable tourism are sensitive to these dangers and seek to protect tourist destinations, and to protect tourism as an industry. Sustainable tourists can reduce the impact of tourism in many ways, including:

1.Informing themselves of the culture, politics, and economy of the communities visited
2.Anticipating and respecting local cultures' expectations and assumptions
3.Contributing to intercultural understanding and tolerance
4.Supporting the integrity of local cultures by favoring businesses which conserve cultural heritage and traditional values
5.Supporting local economies by purchasing local goods and participating with small, local businesses
6.Conserving resources by seeking out businesses that are environmentally conscious, and by using the least possible amount of non-renewable resources

Increasingly, destinations and tourism operations are endorsing and following "responsible tourism" as a pathway towards sustainable tourism. Responsible tourism and sustainable tourism have an identical goal, that of sustainable development. The pillars of responsible tourism are therefore the same as those of sustainable tourism – environmental integrity, social justice and economic development. The major difference between the two is that, in responsible tourism, individuals, organisations and businesses are asked to take responsibility for their actions and the impacts of their actions. This shift in emphasis has taken place because some stakeholders feel that insufficient progress towards realising sustainable tourism has been made since the Earth Summit in Rio. This is partly because everyone has been expecting others to behave in a sustainable manner. The emphasis on responsibility in responsible tourism means that everyone involved in tourism – government, product owners and operators, transport operators, community services, NGO’s and CBO’s, tourists, local communities, industry associations – are responsible for achieving the goals of responsible tourism

Ecotourism

Ecotourism, also known as ecological tourism, is a form of Sustainable Tourism, differing by its focus on ecology. Ecotourism focuses on volunteering, personal growth, and learning new ways to live on the planet; typically involving travel to destinations where flora, fauna, and cultural heritage are the primary attractions.

Responsible ecotourism includes programs that minimize the negative aspects of conventional tourism on the environment, and enhance the cultural integrity of local people. Therefore, in addition to evaluating environmental and cultural factors, an integral part of ecotourism is in the promotion of recycling, energy efficiency, water conservation, and creation of economic opportunities for the local communities. Such changes have become a statement affirming one's social identity, educational sophistication, and disposable income as it has about preserving the Amazon rainforest or the Caribbean reef for posterity.

Coastal tourism
Many coastal areas are experiencing particular pressure from seachange growth in lifestyles and growing numbers of tourists. Coastal environments are limited in extent consisting of only a narrow strip along the edge of the ocean. Coastal areas are often the first environments to experience the detrimental impacts of tourism. Planning and management controls can reduce the impact on coastal and ensure that investment into tourism products supports sustainable coastal tourism

Community-based management

There has been the promotion of sustainable tourism practices surrounding the management of tourist locations by locals or more concisely, the community. This form of tourism is based on the premise that the people living next to a resource are the ones best suited to protecting it. This means that the tourism activities and businesses are developed and operated by local community members, and certainly with their consent and support.

Sustainable tourism typically involves the conservation of resources that are capitalized upon for tourism purposes, such as coral reefs and pristine forests. Locals run the businesses and are responsible for promoting the conservation messages to protect their environment.
Community-based sustainable tourism (CBST) associates the success of the sustainability of the ecotourism location to the management practices of the communities who are directly or indirectly dependent on the location for their livelihoods.

A salient feature of CBST is that local knowledge is usually utilised alongside wide general frameworks of ecotourism business models. This allows the participation of locals at the management level and typically allows a more intimate understanding of the environment. The use of local knowledge also means an easier entry level into a tourism industry for locals whose jobs or livelihoods are affected by the use of their environment as tourism locations. The involvement of locals restores the ownership of the environment to the local community and allows an alternative sustainable form of development for communities and their environments that are typically unable to support other forms of development

Stakeholders
Stakeholders of sustainable tourism play a role in continuing this form of tourism. This can include organizations as well as individuals.

Non-governmental organizations
Non-governmental organizations are one of the stakeholders in advocating sustainable tourism. Their roles can range from spearheading sustainable tourism practices to simply doing research. University research teams and scientists can be roped in to aid in the process of planning. Such solicitation of research can be observed in the planning of Cat Ba National Park in Vietnam.
Dive resort operators in Bunaken National Park, Indonesia, play a crucial role but developing exclusive zones for diving and fishing respectively, such that both tourists and locals can benefit from the venture.

Large conventions, meetings and other major organized events drive the travel, tourism and hospitality industry. Cities and convention centers compete to attract such commerce, commerce which has heavy impacts on resource use and the environment. Major sporting events, such as the Olympic Games, present special problems regarding environmental burdens and degradation. But burdens imposed by the regular convention industry can be vastly more significant.

Green conventions and events are a new but growing sector and marketing point within the convention and hospitality industry. More environmentally aware organizations, corporations and government agencies are now seeking more sustainable event practices, greener hotels, restaurants and convention venues, and more energy efficient or climate neutral travel and ground transportation.

Additionally, some convention centers have begun to take direct action in reducing the impact of the conventions they host. One example is the Moscone Center in San Francisco, California, which has a very aggressive recycling program, a large solar power system, and other programs aimed at reducing impact and increasing efficiency.

Tourists
With the advent of the internet, some traditional conventions are being replaced with virtual conventions, where the attendees remain in their home physical location and "attend" the convention by use of a web-based interface programmed for the task. This sort of "virtual" meeting eliminates all of the impacts associated with travel, accommodation, food wastage, and other necessary impacts of traditional, physical conventions.

Travel over long distances requires a large amount of time and/or energy. Generally this involves burning fossil fuels, a largely unsustainable practice and one that contributes to climate change, via CO2 emissions.

Air travel is perhaps the worst offender in this regard, contributing to between 2 and 3% of global carbon emissions [7]. Given a business-as-usual approach, this could be expected to rise to 5% by 2015 and 10% by 2050. Car travel is the next worst offender.

Mass transport is the most climate friendly method of travel, and generally the rule is "the bigger the better" - compared to cars, buses are relatively more sustainable, and trains and ships are even more so. Human energy and renewable energy are the most efficient, and hence, sustainable. Travel by bicycle, solar powered car, or sailing boat produces no carbon emissions (although the embodied energy in these vehicles generally comes at the expense of carbon emission).