World Bank OKs $400 mln for small firms in India!

WASHINGTON (Reuters) - The World Bank on Thursday approved $400 million in funding to help small and medium-sized enterprises in India cope with the global credit crisis.

The loan will be made to the Small Industries Development Bank of India (SIDBI), which will make available financing to small and medium-sized companies that are finding it hard to get access to credit. It will also go toward refinancing banks and other institutions that lend to small and medium-sized enterprises, known as SMEs.

"This project is part of a larger program of support in response to the government of India request for funding in light of the financial crisis," said Roberto Zagha, World Bank country director for India.

"It is targeted particularly at SMEs, to help address the credit slowdown that has resulted from the financial crisis," he added.

Zagha said credit growth to SMEs has fallen over the last year, which has affected overall growth and development.

RBI: Deposits in Indian banks are safe, not to worry!

The Reserve Bank of India (RBI) has assured that the deposits of the Indian common man in indian banks are safe and not to worry at all. Due to the financial crisis in US and incertainity of the global financial markets everyone in the world is fearing about their hard earned money kept in their respective country's bank. As far as India is concerned RBI governer assured that Indian banks are not hit due to the sub prime crisis in US, which is the root cause of the financial turmoil seen in the world economy. All central banks of almost all countries are taking care of the their banks- Japan & S.Korea have promised unlimited cover to their banks. Even Indian central bank RBI is injecting about Rs:60,000 crore liquidity by reducing the CRR ratio.

Yes, we are witnessing worst time in the stock market industry, but this is just the result of fear and uncertainity in the global economy. So, the conclusion is not to worry about your deposits in Indian banks and just chill! If you are an indian stock investor you may find this article (What to do in such turbulent times? ) to decide upon your strategies to face the stock market uncertainities.

TATA's face Singur farmers: But what's the exact problem in Singur?

TATA MOTORS is facing tough opposition from the Singur farmers (Singur is a village in West Bengal) where it wants to set up the manufacturing plant for the production of the world's cheapest car - TATA's 1 lakh car- TATA NANO. Singur farmers are not ready to give there land even after compensation of about Rs:8 lakh per acre of land and even more for farms which produce 3 crops/year, or which have plots nearer the main road and fields that have tubewells sunk in them. The issue has now taken a form of agitation and TATA is facing wrath of it. According to the The Times Of India TM people from Trinamol Congress have threatened TATA officials and people who work in a small plant set up there to physically prevent from entering plant, and according to the fresh news 5 hours back TATA has decided to move out its 800 employees out of singur plant.

The farmers complain about 2 things - first is about the low compensation and the second is about the lack of faith in getting the promised money from government - and from my point of view these are truely issues worth talking about! This is what one of the farmer Prasenjit Das in Khaserbheri village says "What use is cash to me? Putting money in the bank and earning interest is not enough, especially looking at the rising inflation. With land, my asset remains intact and what I earn from selling my produce is a bonus." Das has another argument to press his case: "Even if the government promises to give me a job, it fails to secure my children's future." - perfect! I agree with him! Why not...nice to see that villagers and farmers- heart of India are understanding the economic factors and inflation concepts.

The question is about the land spanning 997 acres of land, and farmers aren't sure whether government will give them the promised money or not. According to Hindu Business Line article on Nov 16th 2007 -> "The acquisition of the entire 895 acres of private land is virtually complete. Each of the landowners has given his consent to acquisition at prices which are much higher than the prevailing rates. We have already disbursed payments for 550 acres and the rest will be completed within this month," the State Commerce and Industry Minister, Mr Nirupam Sen, told media persons.. So, today is 31st Aug, 2008 - it's been 9 months after this statement from Mr.Nirupam Sen and still the payments aren't in the hands of farmers..? If yes then they shouldn't be agitating and if no then the governemnt has to answer why farmers haven't been paid uptill now?

If TATA decides to withdraw now, they will suffer losses of about Rs:150 crore - and they need to withdraw as per the prevailing conditions in the Singur. While the West Bengal government gets ready to acquire close to 50,000 acres all over the state for a slew of SEZs, ports, roads and so on, it should be a good idea to look at this other side of the story.

This wraps up the complete story till now behind the fight for land, the business people on one side, farmers on others and government in between - who's to blame?? This is not only in Singur, this problem is in many parts of the country since the developments of SEZ's have starting gaining pace.. what's the solution...? Expres yourself in comments...

With Help From Sources: RediffNews, HinduBusinessLine, EconomicTimes.

Franchise Business in India

India is called a developing country, as we don't have another classification as a rapidly developing country. Let me today put some light on India in the franchise business.(Hey hey if you don't know what franchise business is and what exactly you should do to own a fanchisee then you should first read : What is a franchise business??.) The Franchise business isn't new in India and it's early days date back to 1990's. Today India has many franchise businesses of foriegn brands like KFC, McDonald's, Holiday Inn, Gold's Gym, Marks and Spencers and they have reached not only first tier but also many second tier cities in India and they are running successfully.

After 1990 the franchise business has boomed by leaps and bounds and there are many success stories to tell. Franchise business industry in India records a growth of 30%-35% per year from the past 5 years. And yes why not, because the core thing for any business to be succesful is the customers. And India has lot of it- and the world knows this, as a result many multi national companies are happy to offer franchise to Indian businessmans. One of the latest offering I know is of "beard papa's" from Japan. They are an international quality brand when it comes to cream puff's and they are inviting Master Franchisees.

The 4 sectors which have show the most rapid growth in franchise business in India are telecom sector, food sector, retail sector and education sector. These are all poised to grow with rate above 40% per annum atleast for the next 5-6 years. Food and retail sector have seen tremendous growth because the spending power of indian middle class is increasing. Read a splendid article about India's retail sector - India's retail sector is Boooooming...??.

Apart from these 4 sectors, the brewerage industry,health,beauty, and tourism are next to sparkle. India has favourable conditions for any fresh business to florish, also the competition is not as intense as in US and there are a lot of customers-hope you know that India is second largest in population- you don't need to be the king of your sector, you can be not even in top 10 but still you business may grow by leaps and bounds and you will have good profit margin. Couple this with the low rate of francise failure in India and significant return of investment and you will realise India's potential in franchise businesses.