We will strive to accomplish our target under ‘India Business Strategy 2015’: Hitachi India MD

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Hitachi India Pvt Ltd Managing Director Ichiro Lino is eyeing bigger business opportunities in this country. The company has announced its plan for the Indian market, namely, “India Business Strategy 2015”. In an interaction with Bureaucracy Today, the MD chalks out his company’s plans to further develop social infrastructure systems, information and telecommunication systems, high functional materials, and logistics in India.

The history of Japan’s Hitachi Group in India began in 1933 with the export of its fans for household in this country. Hitachi India Pvt Ltd Managing Director Ichiro Lino says, “We expanded our business in a wide range of sector in the last decade in India. Hitachi Construction Machinery Co Ltd acquired the capital of Telco Construction Equipment in the year 2000 following which Hitachi Home & Life Solutions (India) Ltd was set up in 2003. We also established an R&D Centre in Bangalore in 2011.”
He further says, “We demonstrated our commitment in December 2012 by holding a Board meeting in India for the first time outside Japan. After that historic Board meeting, the Hitachi announced its ‘India Business Strategy 2015’ aiming at a consolidated revenue of Rs 200 billion in the fiscal year 2015, approximately three times that in fiscal 2011. And the Hitachi will invest Rs 47 billion to promote various measures to achieve this target. We will stand by India and together fuel a big change of building a sustainable society.”
The Hitachi Group is active in many sectors in India, including those of construction machinery and air- conditioning systems, social infrastructure systems, information and telecommunication systems, high functional materials, and logistics. “We are expanding our business under our policy to contribute to long-term development of Indian society. This is through our social innovation business. India is an important region in our global strategy. we are, therefore, stepping up development of the social innovation business in India. It is an important step which will eventually help us achieve the target of tripling our overall India revenue from $1 billion in FY 2011-12 to $3 billion by FY 2015-16,” says the MD.
How was the year 2013-14 for your company? Could you please also brief Bureaucracy Today about your financials? The MD replies, “We cannot disclose the revenue in the fiscal year 2013-14 at the moment but for your reference, I can say that our consolidated revenue in India in fiscal 2012 was about Rs 67 billion (approximately 100 billion yen).  Our financials for the third quarter ending December 2013  (the operating income of the company) were $ 1,162 million while our earnings before interest and taxes were $ 1,617 million. The net income of the company was $ 1,198 million.” 
In 2012-13 the Hitachi Group expanded its business in India by entering into the Chemical and Allied friction segments. The company has also set up new automotive powder metallurgy and friction materials plants in Neemrana (Rajasthan) and automotive components plants in Chennai. “In terms of mergers and acquisitions in the Information & Telecommunication Systems we have acquired a 100 per cent equity stake of Prizm Payment Service for about Rs 1,540 crore. In February 2014 Hitachi Systems Ltd. acquired a 76% stake in an IT firm, Micro Clinic India Pvt Ltd, in order to expand its IT service business in India. Post-acquisition, the Micro Clinic will be renamed as Hitachi Systems Micro Clinic Pvt Ltd,” discloses Lino.
The MD says, “Under our Social Innovation Business policy we provide solutions and social infrastructure systems that combine products, services and highly sophisticated IT. Our strategy is set along with this two-fold policy.”
He further says, “First, we will accelerate the expansion of businesses to support infrastructure in India by (1) Bolstering production for consumption in India through increased  localization, namely, made in India and made for India; (2) Cementing partnership with Indian companies and expanding the business base strongly connected to Indian market and (3) Further expanding our business in Africa and the Middle East by employing India as a base. Secondly, we will enhance our corporate functions of the Hitachi Group in India in terms of (1) Expanding the R&D Centre in Bangalore; (2) Strengthening the human resource management system; (3) Also strengthening our finance arrangement functions;  (4) Accelerating Hitachi brand activities and  (5) Expanding shared services.”
Ichiro Lino opines, “we will strive to accomplish our business target as outlined in our India Business Strategy 2015 by the concerted efforts of the business unit and corporate functions in the way I explained.”
The Hitachi recently introduced Social Innovation Initiatives through effective use of IT in Healthcare, Agriculture, Banking, Energy, Business Management and Manufacturing. Could you please throw light on it? The MD replies , “In Healthcare, we implement the Proof of Concept project with NHS GM (National Health Service England Great Manchester. (improve disease-prevention services), while we cooperated with Mitsui & Co Ltd in precision agriculture. This trial was conducted in Brazil by using the satellite image analysis to ascertain the growing status. In Banking the company has shipped over 1,000 ATMs (Automatic Teller Machines) in India.  In Energy we provide energy saving as a service in North America. This service enables customers to reduce their total energy cost. The Hitachi provides one-stop service consulting and system integration, operation and maintenance. The company’s business approach changed recently from cost reduction to the creation of a new value.” 
Shalini Singh, Bureaucracy Today

Modifying bureaucracy…

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Can half-an-hour of interview be the basis of a person claiming superiority over others? Is it fair to give preferential treatment to officers belonging to a particular Civil Service? 

Again, is it logical to appoint a person at the helm of affairs of a Government department even if he has no knowledge or expertise in that particular discipline? The answer to these questions is ‘Yes’ if you are a part of the Indian bureaucratic system. But there is a growing resentment among non-IAS officers who allege that the prevailing Central Staffing Scheme (CSS) is biased and heavily tilted towards IAS officers. 

As per the Centre’s policy, the IAS officers have an edge vis-à-vis other Civil Services officers. Compared to other Civil Services officers, those from the IAS have the smoothest career progressions and easy accesses to levers of power. IAS officers occupy almost all senior-most posts at the Centre and in States. 

Strangely, the policy undermines the calibre and expertise of non-IAS officers in their respective fields and instead an IAS officer is appointed to the top echelons of a department even if he or she has no knowledge and experience of that particular discipline. However, the situation might change if the BJP-led NDA comes to power at the Centre. 

Credible BJP sources inform Bureaucracy Today that if Narendra Modi becomes Prime Minister, there is a strong possibility of a revolutionary reform in the bureaucratic system which will “end the hegemony of the IAS lobby” and will bring All India Civil Services officers on a par. Our Cover Story brings to light India’s flawed bureaucratic system and how the career growth of non-IAS officers is trampled by the IAS lobby through the highly skewed process of empanelment under the Central Staffing Scheme. 

Also in this issue, BT brings its readers an exclusive report on the ONGC which tells a sordid saga of the largest integrated petroleum company in India. Confidential documents in possession of Bureaucracy Today reveal that former ONGC CMD Sudhir Vasudeva, who retired on February 28 this year after Oil Minister Veerappa Moily’s recommendation for a one-year extension to him was rejected by the Government, has left behind him a legacy of failure and a severe compromise of efficiency, neglect and cost overruns in the nation’s largest oil PSU.
CBI Joint Director (Policy) Javeed Ahmad who is known for his honesty and integrity shares his experiences with Bureaucracy Today and is candid enough to admit the loopholes in the policing system. The professional journey of the bureaucrat who believes that a police officer gets “an opportunity to wipe the tears of a person everyday” is an inspiration to the new generation of IPS officers who strive to bring a change in the police-public relationship. 
Suhaib Ilyasi

Suhaib Ilyasi: The curious case of missing file ID No. 87360 at Indian Gas major, GAIL

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In most of the big PSU corruption cases inquiries are instituted for the sake of formality. Small-time officials are made sacrificial goats whereas the big fishes are allowed to slip and go scot-free. Similarly it is alleged to have happened in the country’s gas major, GAIL India Ltd. The crucial file No. 87360 which has decisive and essential evidence of alleged connivance of top management officers in the crime is missing. The CBI in its preliminary enquiry report conveniently ignores the role of the senior management of the company and instead small officials and private companies have been made accused in the corruption case.

Bureaucracy Today known for the unbiased and fearless brand of journalism brings to its readers an in-depth and shocking report of alleged corruption in the Government-owned Gas Authority of India Ltd (GAIL)

The missing file

A File ID No. 87360 that was supposed to contain all the crucial information and evidence of involvement of Board-level GAIL officials in the alleged Rs 246.16 crore scam has gone missing from Gail office records. The GAIL in its RTI reply to Bureaucracy Today, dated November 26, 2013 acknowledged; “It is hereby submitted that the file containing desired inputs (having file ID as 87360) was not closed in the Pricing Department, hence it is not available. The same is also evident from the file Movement System report enclosed with the letter.”

A source on condition of anonymity informs Bureaucracy Today that “the file had gone missing from the database of the GAIL. The file was last tracked on July 25, 2006 when it was sent by EVS Rao, then (GM Pricing), to then Chairman and Managing Director UD Choubey at 12.18 pm. Later on November 1, 2006, as per record, the file is said to have been closed by Choubey”.

“Why are you so interested about the file movement? It’s our internal matter. Who gave you the information about this file?,” reacted SB Mitra, GM (Law), GAIL India, when the Bureaucracy Today reporter visited the GAIL headquarters in New Delhi to inquire about file No. 87360 which is related to pricing and the alleged favouring of six private parties by the GAIL.

Alleged corruption and its background

The case of alleged corruption pertains to extending an undue benefit of Rs 246 crore to six private power producers by supplying them cheap gas by GAIL India. The private players subsequently sold electricity at commercial rates against the Oil Ministry’s instructions.

Shockingly the top management of the GAIL in 2010 further entered into fresh agreements with the same companies without resolving the pending pricing issue, despite the crucial ongoing controversy of pricing since 2006. Astonishingly the CBI’s investigations and its Preliminary Enquiry (PE) are dead silent on this critical matter.

In the year 2000, six private companies, namely M/s MMS Steel, Saheli Export, Kaveri Gas, Coromandal Electric, Arkay Energy and OPG Energy entered into separate agreements with the GAIL. The public sector undertaking agreed to supply to the above mentioned private companies a fixed quantity of gas, as allotted by the Government of India. The period of validity of the agreements was fixed as December 31, 2010, though in individual cases, there were some variations.

The agreements provided for the extension of the period of contract. Insofar as the price of gas was concerned, Article 10 of the agreements stipulated that up to March 31, 2000, the price as fixed by the Government of India under a Pricing Order dated 18.9.1997 would be adopted. And after 31.3.2000, the GAIL reserved the right to fix the price as per the directives, instructions or orders of the Government of India. It was also stated in the agreement that the price was likely to be market related in accordance with the current policy of liberalization of the Government.

In other words, the quantity of gas to be supplied to each of the applicants was determined by the Government of India, by individual letters of allotment; and the price payable by the applicants was to be in accordance with the pricing orders issued by the Government from time to time. From the time the six private parties entered into gas supply contracts with the GAIl, till the year 2005, there were no issues. But, on June 20, 2005, the Government issued a Pricing Order bearing No.L-12015/5/-4-GP, revising the pricing methodology that was in force from September 18, 1997.

The decisions communicated by the Pricing Order dated 20.6.2005, which are pertinent for this Bureaucracy Today investigative report, are as follows: “Power and fertilizer sectors are critical to the economic development of the country and the output price of these sectors is either controlled or regulated by the Central and State Governments, who have to bear subsidy to a large extent for any increase in the output price. The specific end users committed under Court Orders/small scale consumers having allocations up to 0.05 MMSCMD also deserve priority in gas supply. Accordingly, it has been decided in the public interest that all available APM gas would be supplied to only the power and fertilizer sector consumers against their existing allocations along with the specific end users committed under Court orders/small scale consumers having allocations up to 0.05 MMSCMD at the revised price of Rs.3200/MSCM. This price would be linked to a calorific value of Rs.10,000 K.cal/cubic metre. Consumers other than fertiliser, power and specific end users committed under Court Orders/small scale consumers having allocations up to 0.05 MMSCMD and getting existing gas supplies through GAIL network, would be supplied natural gas at market related price depending on the producer price being paid to joint venture and private operators at landfall point, subject to a ceiling of ex-Dahaj RLNG (regassified LNG) price of US$3.86/MMBTU for the current year i.e. 2005-06”.

Two Pricing Mechanisms

It may be noted from the relevant portion of the Pricing Order dated 20.6.2005 extracted above, that two different pricing mechanisms were adopted. One was termed APM meaning ‘Administered Price Mechanism’.

The second was market-related price, which depended upon the producer price being paid to joint venture and private operators at landfall point. By virtue of Clause 10 of the gas supply contracts that the parties had entered into, it is obvious that the Pricing Order dated 20.6.2005 was to come into effect. By a letter dated 5.6.2006, the Government of India also sent a communication to the private parties indicating that as per the Pricing Order dated 20.6.2005, a revision of APM gas prices was to be carried out for all consumers, other than those in the power and fertiliser sectors, in a phased manner over the next three-five years. Accordingly, the Government increased the price of APM gas supplied to City Gas Distribution Projects and small consumers having an allocation of up to 0.05 MMSCMD, by 20% over the current APM price of Rs.3,200/MSCM for general consumers and Rs.1,920/MSCM for North-East consumers. The revised prices for other consumers were also indicated in the said letter. Thereafter, the GAIL sought a clarification from the Director in the Ministry of Petroleum and Natural Gas, by letters dated 5.6.2006 and 12.6.2006.

By Shalini Singh, New Delhi

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Suhaib Ilyasi: Bureaucrats in January 2014

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ARIES: The New Year 2014 will start with a bonanza for senior bureaucrats from the professional angle. Your fortune will be at zenith and many pleasant surprises are in store for you. You will be at the helm of affairs and your efforts will get appreciation from all quarters. You are likely to be gifted with a raise in official status. As far as financial matters are concerned, you can explore new options. Any deal of immovable property should be kept pending. Huge financial gains are expected in speculation.

TAURUS: Certain degree of trepidation may prevail for bureaucrats from professional angle during the first fortnight of January. Sudden events during the start of the New Year may leave you flummoxed. However you will get needed respite from mental agony after Makar Sankranti. There will be a revival of the feel good factor. Good professional opportunities will be knocking at your doorstep. Financial gains are expected towards the end of the month. Long pending matters relating to immovable properly will get resolved. You are likely to suffer from backache.

GEMINI: January may not be a very favourable month for bureaucrats from the professional angle. No significant change is on the cards at workplace. You may have to realize the ground realities and take action accordingly. Unnecessary arguments with your bosses should be avoided towards the end of the month. This may be a good month from the financial angle. Financial gains are also expected by way of inheritance.

CANCER: Bureaucrats may have to face daunting obstacles during the month from the professional angle. You should prepare yourself to sail hard to the wind. The road ahead will be bumpy and making right decisions concerning your career will be a horrendous task. This will not be a favourable month from the financial angle too. However, the success of your child in a competitive examination will be a source of pleasure for the family.
LEO: The year will start with a gift for bureaucrats from the professional angle. Life will be buzzing with activities at workplace. You will remain vibrant and everything will appear to be moving as per your command. You will get full support from your bosses and most of your expectations will be met. Financial gains will be unbelievable and a new source of income will develop. Romantic ties will get strengthened. Most of the time will be spent in socializing. Financial gains are expected in speculation.
VIRGO: This will be a favourable month for bureaucrats from the professional angle. A silver lining will be clearly visible and decisions made during this month will go a long way in enhancing your career prospects. Life-time opportunities will be knocking at your doorstep0. Financial gains will be unbelievable. This is the right month to finalize a deal of immovable property. Bureaucrats suffering from heart ailments need to be under medical supervision.

LIBRA: This will be an excellent month for bureaucrats from the professional angle. Results in the profession will match your expectations. You are likely to be nominated for an important deputation posting. Your efforts will get recognition and you will feel proud of your professional achievements. God will shower blessings on you and your family and prosperity is indicated by planetary positions.

SCORPIO: This will be a favourable month for bureaucrats from the professional angle. You will continue to move in a higher trajectory and your legitimate expectations will be met. You cannot be a fence sitter and you may be required to make tough decisions at workplace. The efforts made by you will get appreciation.

SAGITTARIUS: The starting of the New Year will be with a positive note for bureaucrats from the professional angle. You will be taken unawares by a pleasant surprise which will change your professional scenario. Lots of activities are expected at workplace and you may feel proud of your achievements. There will be no dearth of money.

CAPRICORN: This will be a reasonably good month for bureaucrats from the professional angle.  You are likely to be nominated for a plum posting towards the end of the month. Life-time opportunities are expected in your career.

AQUARIUS: The New Year may not start on a positive note for bureaucrats from the professional angle. Rather the verdict in a long- pending professional matter may go against you. There may not be respite from mental agony. You may not get the support of your bosses. Major decisions concerning your career should be kept pending. No change is expected in your financial position. A deal of immovable property should not be finalized during this month. Bureaucrats suffering from high blood pressure or heart ailments need to be under medical supervision.
PISCES: This will be a memorable month for bureaucrats from the professional angle. The New Year bonanza concerning your career will make you happy and vibrant. Your fortune will be at zenith and most of your legitimate expectations will be met. Planets even indicate a raise in your status in the profession. An official foreign trip is likely to be planned. There will be total harmony on the domestic front. You may plan buying a new vehicle or jewelry. Huge financial gains are expected in speculation.
This content is published in Bureaucracy Today magazine in January 2014 edition.
Bureaucracy Today is published by Suhaib Ilyasi

Suhaib Ilyasi : People’s power A sweeping change ahead?

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The stunning win of the AAP in Delhi Assembly elections is the victory of common people’s belief that there is hope against darkness. The party’s victory has put the common man back to the centre-stage of politics from the margins to which he had been relegated. As Arvind Kejriwal began his new journey into politics from the same Ramlila Grounds where his NGO, India Against Corruption, had declared war against the corrupt, Bureaucracy Today tracked the historic moment and paused to feel the pulse of the aam aadmi, who after being fed up with a string of scams and the ever escalating cost of the humble onion — a staple in every household– went for the broom.

In a shocking revelation, our Cover Story brings to Bureaucracy Today readers the explosive report of how the CBI, which is probing the irregularities committed by GAIL officials by allegedly favouring six private companies and causing a Rs 246.16 crore loss to the exchequer, in its preliminary enquiry report conveniently ignores the role of senior management of the company and small officials and private companies are made accused in the corruption case. During the CBI investigation, it came to light that the crucial file no. 87360 which has decisive and essential evidences of the alleged connivance of the top management officials in the crime is missing.  However, a tip-off by an anonymous GAIL official to BT indicates that the file is not missing but lying with the company officials. It seems that more skeletons will tumble out from the country’s leading natural gas major’s closet following this BT investigative report. Bureaucracy Today is keeping a close watch on the developments and will update its readers about them in detail in its forthcoming editions.

Also in this issue we have an investigative report on how government subsidised foodgrains meant for the downtrodden are being siphoned off by greedy hands along the way in Bihar’s Bhojpur district. A Bihar-based freelance investigative journalist, who did a sting operation of the scam, trusted Bureaucracy Today and contacted us for a platform to break the multi-crore scam.

BT Special Report focuses on the new DoPT rules which made it mandatory for State Civil Services officers to face a UPSC test and an interview for promotion to the IAS. The All India Federation of State Civil/Administrative Service Associations has protested the proposed move, saying it is against public interest and will take away the legitimate right of the most experienced and seasoned SCS officers to get promotion to the IAS after serving the State sincerely and diligently for years together. The IAS lobby is silent on the issue though.
Suhaib Ilyasi

Excellence awarded

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With the triumphant presentation of the BT-Star PSU Excellence Awards 2012 on 25th May 2012, the team of Bureaucracy Today magazine is overjoyed with the huge response. The significance of the awards lies in recognizing the vital contribution of public sector enterprises in supporting the Indian economy.

I am much pleased to tell our esteemed readers that the Awards marked the beginning of a whole new chapter on recognition and appreciation of PSUs.

It has given State undertakings one of the brightest platforms.
The offer of recognizing the PSU excellence under seven categories, with a total of 14 awards, including those under the sub-categories, had an overwhelming response from the companies, as the jubilant BT received 216 entries as nominations.

The event was marked with victorious smiles and conquering hearts as the milieu was a grand arrangement of both beginning and success.

BT is thankful to the jury and the Organizing Committee for their extensive support. The jury Chairman, Mr. TKA Nair, and its eminent members, Mr. Deepak Parekh, Dr. MS Swaminathan, Dr. Mihir Shah and Mr. Nishikant Sinha, have been the pillars of expertise behind the esteemed felicitation. The Organizing Committee Chairman, Mr. Bhaskar Chatterjee, and the advisors, Mr. Aishwani Dhar and Mr. Veeshal Bakshi, have successfully made the Excellence Awards event possible. My special gratitude towards Mr. Oscar Fernandes, the Chief Guest on the special occasion and also to the numerous other eminent personalities from government and business sector.

Fearless journalism’s tribute to fearless bureaucrat PS Appu: Our May 2012 Edition cover story accolades could not be complete without the contribution of Mr. Pradip Bhattacharya, a retired IAS officer who compiled and edited “The Appu Papers” and is also credited with a book, “Crisis in Governance”. BT specially thanks him for his heartful participation in the story.
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The legacy lives on…

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Recently Prime Minister Manmohan Singh on Civil Services Day (April 21) told bureaucrats to take bold decisions and not be afraid of witch-hunting. The PM stressed the fact that there was no truth in the perception that the moral fibre of our civil servants and public servants in general is not as strong as it used to be some decades back and that our civil servants are now more likely to succumb to extraneous pressures in their work. He felicitated the talent in the Civil Services, saying that many of our civil servants would rank among the best in the world.

The bureaucracy has been evolving with the countrys evolvement. But certain principles have stood the test of time. In this special issue BT pays tribute to iconic bureaucrat and Padma Bhushan recipient PS Appu who fearlessly depicted his views to the Government to the extent of resigning from the coveted post of Director of the Lal Bahadur Shastri National Academy of Administration on account of injustice. The incident is known to many but the above said incident is not his claim to fame. Larger than life, Appu was a nation builder and did not bend in front of wrongdoing. A man of his word, he did not seek publicity but actively promoted good values and principles through his writings in various publications. He inspired many during his tenure in the Civil Services. Most bureaucrats who knew Appu describe him as a person with impeccable integrity. 

Good work is always appreciated and acknowledged as we see in the case of the Maharashtra Police in which five officers have been ensuring peace and safety of citizens. And for making a successful Village Health and Nutrition Day, 2004 batch Manipur-Tripura cadre IAS officer Saumya Gupta and her team were awarded the Prime Ministers Award for Excellence in Public Administration.

If reforms and growth has to happen, then we need officers who believe in Appus principles. When people walk on these principles, policy paralysis can be prevented. And as the Prime Minister said, we should encourage boldness in decision making, provided that the decisions are well considered and as per the law of the land. A civil servant who does not take decisions might always be safe, but at the end of the day he or she would have contributed nothing to our society and to our country.

Suhaib Ilyasi

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