New real estate exposure norms for urban co-op banks

Business Standard: June 10, 2010

Mumbai: Reserve Bank of India has revised the norms for urban cooperative banks for giving loans to the housing and real estate (RE) segment. Working capital loans to small contractors against hypothecation of construction material are exempted from the existing norms that allows UCBs to use 15 per cent of the total deposits for giving loans for housing and commercial real estate, RBI said. In a communication to chief executive officers of UCBs, RBI said it has fine-tuned the rule for aggregate limit for housing finance. Now, urban banks can use up to 15 per cent of deposits to provide housing, real estate and CRE loans. Earlier, the RBI norm permitted them to use up to 15 per cent of deposits for giving advances to housing loans and other block capital loans. The 15 per cent ceiling was reckoned on total deposits at the end of March 31 of the previous financial year. The exposure to compute the ceiling will include fund and non-fund based facilities extended to customers. Many urban banks and federation of cooperative banks had approached the central bank for clarification on norms that restricts exposure to real estate including housing loan and commercial realty to 15 per cent of deposit base.

Rs 1,400-cr green urban transport project launched

The Hindu Business Line: June 10, 2010
 
New Delhi: The Urban Development Ministry has launched a Rs 1,400-crore green urban transport project called the Sustainable Urban Transport Project (SUTP).
The Global Environment Facility, The World Bank and the United Nations Development Programme are providing both technical and financial assistance for its implementation.

Select cities
Under the project, green urban transport will be introduced in select cities to overcome pollution and other hazards of the existing urban transport system, including traffic impediments for pedestrians.
Four such demonstration projects have commenced in Pimpri-Chinchwad in Pune, Indore, Naya Raipur in Chhattisgarh and Mysore.
Launching the project, the Union Minister for Urban Development, Mr Jaipal Reddy, said there was an urgent need to shift from personal to public transport and the project has been initiated with this objective.
The Government has given high priority to improved urban transport since the launch of the JNNURM (Jawaharlal Nehru National Urban Renewal Mission). More than 12,000 buses have been sanctioned for 60 cities under the mission for the improvement of public transport, while capacity building efforts for better public transport were also being made.

Independent transport body
Mr Reddy said an independent transport authority should be set up in each major city for better governance and planning of public transport.
The SUTP aims at arriving at a long-term strategy to empower planners, decision-makers and other professionals by building their capacity in planning and implementation of the Green Urban Transport Project.
Both the World Bank and UNDP provide loans and grants for SUTP, which is also co-funded by the Government, the respective States and the cities.
This is the first time that such multiple international funding agencies have come together for a transport project in India.

India Inc steps up hiring, job index up 7%

By Agencies 

Riding on improving business confidence, Corporate India's online hiring activity rose for the fifth month in a row, leading recruitment services provider Monster India said.

The Monster Employment Index, a monthly gauge based on a comprehensive review of employer job opportunities from a large selection of online job sites, climbed by 7 per cent to 125 in April, from 117 in March.

"The April rise in Monster Employment Index India is a positive sign as employers continue to expand hiring efforts at the beginning of the second quarter," Monster Worldwide managing director (India, Middle East and Southeast Asia) Sanjay Modi said.

With this, the online employment availability in healthcare, bio technology, life science and pharmaceuticals witnessed its largest monthly rise. Overall, job opportunities rose in 18 of the 27 industry sectors tracked in the survey.

Healthcare led the rise with a 29-point gain in April, indicating a relatively high level of online recruiting in support of scientific research and development activity.

The banking, finance and IT sectors also edged higher in April. Consumer-driven sectors, such as production and manufacturing, automotive, home appliances and real estate, witnessed strong growth over a three-month period.

In the IT industry, the online job demand increased by 51 per cent from January levels. Meanwhile, education was the only industry to grow month-over-month, over a six-month period.

"With other indicators, such as business confidence, improving and most industries and occupational categories in the index registering recent positive trends, we hope to see continued improvement in the future," Modi added.

Online job demand rose at all the 13 cities monitored by the index in April, with Kochi, Coimbatore and Ahmedabad registering the largest jumps.

Among major metropolitan areas, brisk hiring activity was witnessed in Mumbai.

Delhi-NCR and Bangalore grew by 5 per cent over March levels, though hiring activity in Bangalore was relatively restrained compared to the previous month, the study said.

During April, online recruitment activity rose in 13 of the 14 occupational groups tracked, with online job demand for healthcare and engineering/production professionals witnessing the greatest monthly increase.

Educated, unemployable

By Garima Pant 

A yawning gap

Why must Infosys (INFOSYS.BO : 2627.5 -27.5), one of the biggest names in the IT industry, which recruits the cr me-de-le-cr me of professionals from the best institutes in the country, spend $184 million on training programmes annually or invest up to 30 weeks of residential programmes on engineers it hires? The answer is simple the need to build employee competency levels. Says Srikantan Moorthy, VP and head, education & research, Infosys Technologies, "We recruit people on the basis of their learning ability. The investment is a non-negotiable. Besides training we conduct residential programmes to enable our engineers to meet client requirements. The need of the hour is not just for individuals to have strong conceptual knowledge, but also strong application capabilities." His information is, perhaps, an indicator of how inadequate India's education system is when it comes to preparing an individual for a job.

While unemployment cannot be brushed under the carpet, youth employability is no less a nightmare. A lot can be blamed on the education system. As many as 90% employment opportunities require vocational skills, but 90% of our college and school outputs are just cram experts, rendering no less than 57% of India's youth suffering with some degree of unemployability, reveals a recent TeamLease Labour report.

So, if you were looking at the bright side of the picture that just 8% of the youth in India are unemployed, there's hardly a reason to cheer, because 53% of the rest suffer from some form of skill deprivation. That sets back the demographic advantage India could hope to enjoy in future.

"India is coming into its dividend as an unusually young country in an unusually ageing market a young, fresh-faced nation in a graying world," Nandan Nilekani observed in his book, Imagining India: Ideas for the New Century. That's not just another observation. By 2025, 25% of the world's workers will be Indians, points out the TeamLease report. Three hundred and fifty universities, 18,000 colleges and 6,000 ITIs will till then continue to churn out five lakh technical graduates, along with around 2.3 million graduates (or maybe more). Unfortunately, just 10-25% of them will be 'employable', according to the Confederation of Indian Industry (CII).

If that to you seems far fetched, consider this: according to a 2008 report of the Boston Study Group, India by 2012 will have 1.3 million surplus of un-trained and under-educated people and the country will fall short (by 5.3 million) of real talent.

An inefficient human resource development regime in the country, absence of an academia-industry interface, lack of focus on skill development of individuals and an almost non-existent quality assurance framework are the root causes of the poor outcomes of the current educational regime. With no returns expected in terms of jobs, there is a significant drop-out rate leading to an under-trained and under-skilled workforce.

"I opted to work right after graduation as I could see how my seniors were struggling to find a job of their choice and had to make peace with jobs that were underpaying and not worth their efforts," rues 23-year-old Jitesh Bhasin, a BPO employee. His fears are not unjustified.

This trend will result in a deluge of 'shall drop, will work' accumulating at the bottom of the education pyramid. The NSS' 61st round employment data hardly sprung up a surprise when it revealed that in urban India, 207 out of every 1,000 men who completed their graduation or went beyond that remained unemployed, against only 10 men out of a 1,000 who are not literate.

Skill deficit

Consensus on the lack of vocational training in the country impeding competitiveness and productivity of the workforce is easy to achieve among experts. How else do you interpret that only 25% of the engineering graduates, 15% of finance and accounting professionals and just 10% of professionals with any kind of degree are suitable to be employed in MNCs. Incidentally, that finding comes from an MNC itself (McKinsey).

India better pull up its socks. Close to 500 million people, says McKinsey, will need to go through skill development by 2020. As Dilip Chenoy, CEO, National Skills Development Council, says, "It's not education that is primarily responsible for lack of skills. It's probably the lack of systematic approach in skill development and building on whatever education one receives."

The 11th Plan document suggests that due to "the near exclusive reliance upon a few training courses with long duration (two to three years) covering around 100 skills, 80% of new entrants into the workforce have no opportunity for training in skills. 12.8 million population (sic) will enter the work force as new entrants per year. As against this, the present (largely government-administered) system of delivery can only provide training to 3.1 million per year".

The manner in which higher education institutes have grown in the past decade facing difficulty in attracting top-notch faculty, retaining them, and enhancing their skills is worrisome. "Quality has suffered a lot with this expansion," says Amit Bansal, CEO and founder of PurpleLeap, an Educomp-Pearson company that is into entry-level talent management. Many of them, therefore, do not have the ability to attract the best students. "It is the increasing number of students coming out of the neo- and non-academic managed colleges that contribute to non-employability or under- employability," says Srinivasan. With the dilution of entrance standards, the overall education quality is being compromised. K Pandia Rajan, MD, Ma Foi Management Consultants, adds how the academic infrastructure in engineering colleges has become very basic. "A quantum leap in engineering colleges due to poor accreditation policies is a big problem," he says.

Another area of focus is lack of soft skills. Shankar Srinivasan, chief people officer, Cognizant, feels that often students coming out of Indian institutes are technically proficient. "But they lack behavioural prerequisites such as communication, presentation, confidence and other soft skills," he says. Whether the reforms initiated by the government in terms of PPP model being adopted for upgrading ITIs and a modular employable skills programme with an objective to provide employable skills to early school leavers, existing workers and even ITI graduates works remains to be seen.

Undeniably, the need of the hour is to implement a skill-based education system in place of the degree-based system to sincerely solve the problem of educated unemployment.

India, China hiring prospects strong - Manpower

 

By Nick Zieminski

NEW YORK (Reuters) - Employers in most economies are more likely to add workers than three months ago, including those in the United States, but big gains are limited to booming emerging economies like Brazil, India and China, according to a quarterly survey by Manpower Inc.

Manpower's survey, considered a leading indicator of labour demand, suggests an employment recovery will continue in much of the world, but employers remain cautious. In the United States, large-scale job creation is unlikely in coming months.

The global employment services company said Tuesday its seasonally adjusted U.S. net employment outlook was plus-6 for the third quarter, up slightly from plus-5 in the previous survey. It was negative a year ago.

Manpower's index, based on interviews with 18,000 U.S. hiring managers, measures the difference between those who say they will add to their workforce and those who plan cuts. About 70 percent reported no change in their outlook, continuing a recent trend that shows many employers remain unconvinced about the sustainability of the current economic rebound.

"We'll go into the third quarter and see more of what we saw in the second -- no doubt improved BLS numbers, but not so improved that we're going to feel like we're out of the woods," Manpower Chief Executive Jeff Joerres said.

BLS refers to the U.S. government's Bureau of Labour Statistics, which reports monthly employment figures and Friday said 431,000 jobs were added outside the farm sector in May. That was far fewer than expected, and growth in private payrolls also fell short of forecasts.

Indian students look at a text message from a mobile phone in Kolkata, August 23, 2005. Employers in most economies are more likely to add workers than three months ago, including those in the United States, according to a quarterly survey by Manpower Inc. REUTERS/Jayanta Shaw/Files

Encouraging economic signals include a production managers' index that indicates a recovering manufacturing sector, Joerres said. But U.S. employers are able to meet added demand with their existing workforce, and will resist adding new workers until they see credible evidence that demand is sustainable.

"To get that evidence, we may have to wait until the first quarter," Joerres said, noting that hiring is seasonally weak in the fourth quarter. He described the pace of a U.S. jobs recovery as "still very tepid."

Manpower's survey dates back to 1962 in the United States but has a shorter history in other countries. The Milwaukee, Wisconsin-based company is active in 82 countries and makes most of its sales and profit outside the United States.

BRAZIL, INDIA, CHINA RANK HIGHEST

Manpower's global survey of hiring intentions, based on 61,000 interviews, found better jobs prospects in 23 of 36 countries and territories when compared with the second quarter, and all but four were higher from a year ago.

The strongest hiring prospects are again in emerging Asian economies like India and China, where companies enjoy both local and export demand. China's hiring outlook is the strongest since Manpower started surveying employers there five years ago, while India's has rebounded to a two-year high.

Prospects improved in Japan for the fourth consecutive quarter but remain the lowest in the region, partly a result of political turmoil.

"There's a lot of trepidation in the air in Japan, and as a result hiring is being depressed," Joerres said.

In Latin America, the majority of employers in Brazil anticipate taking on staff. Mexico can also expect a better hiring environment, especially in manufacturing and mining, but the hiring outlook dipped in Argentina.

In Europe, the weakest third-quarter hiring plans were reported in Italy, Ireland, Spain and Greece, while employers in larger economies like France, Germany and the United Kingdom are more willing to add workers over the next three months.

Manpower's third-quarter survey was conducted before a debt crisis in Greece led to a nearly $1 trillion European rescue plan. But Manpower's internal data suggests the crisis has had limited effect on the confidence of European employers.

"We've been seeing really no change in our business since the Greek credit crisis of a month ago," Joerres said.

More employers than last quarter expect to boost hiring in Central European economies, as well as in Spain, Sweden, Austria and Belgium, Manpower said. Prospects are down in Norway, Switzerland and in South Africa, which Manpower groups with Europe and the Middle East.

(Reporting by Nick Zieminski, editing by Matthew Lewis)