Business Age

Focus on expenditure to fight slowdown, election?

Asian — Fri, 20 Feb 2009 19:04:21 GMT

By Dipankar Mitra

The government stuck to the conventions in presenting an Interim Budget shorn of customary tax measures and announcements of new flagship schemes. This belied the industry wishlist of all round tax reductions and sector specific concessions. However, within the constraints placed by the propriety of an Interim Budget, there were a few takeaways, including clarity on the fiscal position of the government.

The pervasiveness of the global crisis has increased the acceptability of fiscal slippage already underway in India as a result of large- scale election year bounties. The swing of international opinion for use of large fiscal stimulus to fight recession (with IMF chief economist Olivier Blanchard endorsing a fiscal boost of 2 per cent of global GDP to fight the crisis) has contributed towards a decisive deferment of fiscal consolidation goals and made the (unlikely) rating downgrade of international agencies a worthwhile risk to take.

The continued focus on the expenditure side in the Interim Budget, is therefore as much a reflection of this new found acceptability of fiscal policy as it is of the impropriety of announcing further tax cuts and populist schemes in the Interim Budget. Furthermore, it reflects a political judgment to favour the relative insulation of certain sectors (e.g., rural economy) from the impact of the slowdown.

That such a strategy is associated with larger political payoffs brings a rather opportune moment to align good economics with good politics. The government has also reiterated its resolve to focus on the implementation aspects of the cumulative measures already announced by it.

While the government hasn’t lost any extraordinary tools to fight extraordinary circumstances (e.g., through ordinance), the reluctance of both fiscal and monetary authorities to deliver fireworks on pre-specified dates signifies a shift of stance towards absorption of policy measures and a keenness to save some policy headroom for the future. The financial markets, meanwhile, will largely have to muddle its way out of turbulent times. The RBI stands ready to cushion any adverse developments, especially ensuring smooth sailing of the government’s huge market borrowing programme, a corollary of the derailment of the fiscal targets. So over to the RBI now.

The writer is country economist, Noble Group

Loopholes in law put firm’s directors in a fix

Asian — Mon, 15 Sep 2008 17:59:12 GMT

By K. Venugopal

Thiruvanthapuram

Directors of many firms are being hauled to court over cases involving dishonouring of cheques because of the lack of clarity in certain provisions of the Negotiable Instruments Act.

Though not all directors are involved in the day-to-day dealings of the company and meet only once in a quarter, they are being made to answer for ‘vicarious liability’.

This is causing them much heartburn and has also delayed many cases interminably. The Negotiable Instruments Act of 1881 was amended in 1989 with introduction of Chapter 17 to penalise persons for dishonour of cheques. More amendments were made to this chapter in 2002 to strengthen provisions against economic offenders.

Prior to these amendments, complainants had to rely on the criminal law, namely Section 420 of Indian Penal Code, to get justice in cheque dishonour cases. Though the amendments were well-intentioned, they haven’t always had the desired effect. For one, cases generally take five to six years to get into trial and appeals to higher courts further delay matters. Companies are involved in many cheque dishonour cases and the offence is "spread out" among all directors under the Act. Not many shareholders are aware of this.

However, an amendment was made to Section 142-1 to exempt nominee directors of the companies from such charges. But this still leaves ordinary directors vulnerable. State High Courts and the Supreme Court have given judgments in several such cases which have come before them after 1995. But they have not ruled categorically as to what evidence should be made available against directors to make them liable and what should judges peruse before admitting the cases.

Complainants generally made broad allegations that all directors are responsible for the affairs of the company. But they usually don’t submit any specific evidence on this. The long-drawn out judicial process in our country is well known and often directors have to incur huge cost to fight cases for several years.

Similar laws in other countries do not fix liability on directors except those who have actually signed the instruments.

An amendment was proposed in India to incorporate a similar provision in 2000 but it was not put to effect.

The Naresh Chandra Committee on company law also recommended that independent directors be freed from such liabilities.

If a suitable amendment is made to Section 141-2 of the Act or through company law with retrospective effect from 1989, thousands of cases will go out of the pending list. This will save much time and money.

A dream team of specialists

Asian — Mon, 15 Sep 2008 17:58:46 GMT

Arun Seth

The Early 1980s saw a raft of huge IT service contracts that became the blue print for the business world.

Today, however, enterprises want access to a wide range of outsourcing options to reflect emerging and increasingly unique requirements. A single supplier offers convenience and straightforward governance but, in many cases, growing business complexity dema-nds ever focused and diverse expertise.

The approach reflects Forrester Research’s view of IT and communications as "di-stinct islands" that require discrete management and integration expertise.

In response, the modern trend of multi-sourcing has emerged as enterprises look to source a ‘dream team’ of specialists. The approach, unsurprisingly, is no miracle cure. The expertise mi-ght be right but governance issues have, on occasions, seen many hands rapidly degenerate into many more pointing fingers when problems occur.

Enterprises have embra-ced multi-sourcing to deliver innovation for significant service improvements and reduce overall risk exposure at a competitive cost. On paper, at least, renegotiating a contract with one supplier with a 10 per cent failure rate is more challenging than replacing 10 per cent of a supplier matrix.

However, the issue of co-mplexity — this time in a managerial guise — rema-ins the enterprise challenge. Professor Phanish Puranam of London Business School succinctly encapsulates the good and bad sides of sourcing and deploying new layers of expertise.

He said: "Using multiple vendors can create competition and lowers the risk of delivery failures, escalating fees and inflexible services. However, this approach al-so creates enormous co-ordination complexity for the client and for the vendors themselves. How do you get multiple vendors to deliver a seamless integrated service? How easy is it to switch to another vendor when one vendor does not perform? Who is ultimately accountable?"

It’s not unknown for enterprises to incur costs from vendors who, for reasons that include inexperience or cultural differences, fail to work together as planned. Multi-sourcing without effective governance can be painful.

An Orbys Consulting survey confirmed that some firms have struggled to manage multiple IT outsourcing relationships. Apparently, in the United Kingdom alone, 41 per cent of large companies had no formal multi-sourcing fra-mework in place to define the interfaces between different suppliers. This is a worrying statistic for IT firms that want to outsource some fun-ctions with peace of mind.

What we’re seeing today are initiatives that help customers deal with both technical and managerial complexity. Vendors have, over the past five years, remembered the golden rule of outsourcing — make it easier for customers to focus on their core offering.

The changing enterprise mindset has provoked a res-ponse. The industry has worked hard to ensure that modern outsourcing appro-aches take care of both the technical and governance challenge. Management tea-ms realised customers wanted single source governance standards with multi-source expertise.

So began the process of competitive collaboration. Enterprises now have the option of working with suppliers who are committed to working together to remove complexity and risk from their business.

A modern business practice collaboration has rapidly emerged as a modern business zeitgeist promising major benefits from mutual trust and innovation. Such a shift in business behaviour, as Tapscott and Williams wrote in their seminal book Wikinomics, affects "every aspect of management". Outsourcing is no exception.

To ensure workable governance structures, enterprises need to know that suppliers are committed to one another through legally binding management proce-sses. A journey taken with a hastily constructed patchwork of suppliers simply doesn’t come with the same promise of solidarity.

The issue of trust is crucial. Suppliers must earn trust through mutual commitments.

Suppliers with evidence of collaborative commitments have already taken tangible steps to deal with enterprise risk. The approach gives clear governance guidelines that can be analysed before a deal is signed giving the enterprise a clear idea on how the deal will unfold.

IT and networking provi-ders have converged and, in the future, both will move towards the applications sp-ace but stop short of applications development and maintenance. The customer will demand steps are taken to enshrine business performance in service-level agreements and the outsourcing mix will become even more complex.

Nobody can blame enterprises for wanting to pass on complexity and risk. They must, however, realise that the risk does not disappear.

If suppliers are ill-equipped to manage to manage the issues collectively it will one day come back to haunt them and proof of collaboration is an essential starting point for any project.

The author is the chairman of British Telecom (India) and a member of Nasscom’s executive

council

Windfall tax can’t be levied on private firms

Asian — Mon, 08 Sep 2008 18:03:09 GMT

T.N.R. Rao

A curious recommendation by the B.K. Chaturvedi Commission in its report on the levy of windfall tax on oil exploration and production (E&P) companies rela-tes to their caregorisation into pre- and post-NELP bl-ocks. It assumes that all pre-NELP (New Explorat-ion Licensing Policy) blo-cks are on nomination basis and others as given on bidding basis.

This premise is not based on facts. Prior to allowing private operators, all E&P activities were confined to NOCs (national oil companies) and post-1999, NOCs were also required to bid and win the blocks for their E&P activities. But that does not render pre-NELP blocks originally with NOCs but withdrawn for offer on ICB to private firms as well as NOCs to be considered as given on nomination.

Right from the 1980s, when the bidding rounds started, all blocks were offered on ICB basis. By no stretch of imagination can they be termed to be given on nomination basis to private operators who won them on ICB basis. It makes little difference to private players whether they were pre-leased or not, as the government as owner choo-ses to replace NOCs by private operators or a consortium of private and NOC operators or purely by NOCs in case they win the bid. The mere change in nomenclature to NELP does not anyway render earlier offers for bid less competitive. If NOCs reg-ain such withdrawn blocks in ICB, they cease to be ones obtained on nomination and are entitled to be treated on par with others who win in such bidding.

In the early 90s, while ONGC and OIL were paid cost plus price for oil and gas under the APM for nominated fields, in the production sharing contracts awarded on ICB with participating interests by ONGC and OIL, the latter were treated on par with private operators and paid international prices for cr-ude and realise market price for natural gas. Further, a large number of blocks offered post-1999 NELP are recycled blocks — pre-leased or pre-explored or relinquished — but the co-mmittee sees no inconsistency in considering them as non-nominated blocks for windfall tax purposes, but still shies away from categorically making them subject to windfall tax.

The distinction made is a travesty of facts, apart from being invidious and the arguments specious as they fly in the face of law governing the fields. It is difficult to see whom the committee is trying to fool. A charitable view could be that the committee has poor grasp of facts and poorer appreciation of law. But a less charitable view in the current political scenario does not make it look such an innocuous oversight. This distinction shields companies targeted for wi-ndfall tax by the new ac-complices of the UPA government. But its unintended consequence is to victimise those independents whose successes in India put the country’s basins on the world map as prospective regions for oil and gas. One hopes that the original proponents of the tax are not naïve enough to let this mischief go unnoticed.

The author is former secretary, Union ministry of oil and petroleum

In a sez pool

Asian — Mon, 08 Sep 2008 18:02:11 GMT

Sajjan Jindal

Let me begin by saying that whatever has happened in West Bengal particularly at Singur is the most unfortunate thing at times when the entire State has emerged among the lead states for attracting investments.

The entire Indian Inc., including the Assocham, has supported and will continue to support Tatas including the government of West Bengal so that the Nano is rolled out from Singur only. It will be most unfortunate if Tatas are forced to move out of West Bengal. That would mean the state will emerge a laggard in terms of attracting investments.

My personal experience in West Bengal is extremely interesting and satisfying as I am putting up a power and steel plant in the state. I have interacted with authorities, bureaucracy and the chief minister, Mr Buddhadeb Bhattacharjee, several times and my interaction will go on with them in future too. Because of the investment-friendly climate of West Bengal, we happened to be one of the largest industries. If the state had not provided me with a congenial industrial climate, I would have myself dithered before put-ting in so much of money.

I have gone through the process of land acquisition, luckily in my case things were smooth. I don’t understand why Singur issue has been so over politicised in the case of the largest industrial house in India, the Tata’s who enjoy so much support from the public.

The Special Economic Zones (SEZs) have been the most debated upon subject in the country. Initially, things did seem very smo-oth and the concept was received equally well by the industry as well as policy makers. However, subsequently, it caught the imagination of politically-vested interests, and resulted in widespread confusion on the topic. I am of the view that in this context, certain measures have to be adopted, to ensure that SEZs truly fulfil the mandate of generating economic activity, jobs and well-being.

The political-will of the UPA government in implementing SEZs has been really commendable. However, there are certain issues, which if addressed, will all disputes, if any.

It needs to be understood that land is the most sensitive issue as far as an Indian farmer is concerned. It’s not treated as just an economic resource, but more often than not, has a strong emotional connect as well. There is an increased confidence among Indian farmers in SEZs with the implementation of a "Willing buyer Willing seller" model for land acquisition.

Going forward, developers can be asked to take voluntary steps to ensure that a farmer selling his land for a project, becomes a partner in the prosperity that the project generates. It isn’t difficult to achieve. In the large-scale SEZ or industrial projects, 10-12 per cent of land in the developed project should be returned back on a commensurate basis to farmers who have given their land for development. This will lead to an "all-inclusive" growth, and will be win-win situation for all parties. It will be a major incentive for farmers to sell their land for such projects and facilitate the land acquisition process.

SEZs in India still form just an infinitesimal fraction of the total Indian land-mass. At present, the total land area proposed for SEZs in various parts of the country is just 1,945 sq km. This comprises of all SEZ projects, including the ones which have been notified, the ones which have got formal approval and the ones which have just got an in-principle approval. This is just 0.065 per cent of India’s total land area, which is about 30 lakh sq km and just 0.12 per cent of agricultural land, which covers a little more than 16 lakh sq km. There have been talks of imposing a one per cent cap on industrialisation in the country, which leaves 30,000 sq km land in the country as industrialisable. Even if SEZs form a mere 25 per cent of all industrialisation projects, there is scope for earmarking an additional 4,500 sq km. Here, it needs to be understood that SEZs will not just be industrial hubs. It will be proper urban centres.

The empowered group of ministers (EGOM) on SEZs have imposed an upper cap of 5,000 hectares for multi-product SEZs in the country. It is a balanced decision, considering the current political scenario. However, the government should keep a flexible approach to the issue, and should not be closed to the idea of further liberalising this upper-cap. SEZ developers all over the world agree that the bigger the scale is, the better is the project. The Chinese experience is a living manifestation of this. While 1,945 sq km of land have been earmarked for over 500 projects in India, the Hainan SEZ in China alone covers an area of 34,000 sq km.

A clear distinction should also be made as to which land to notify for such SEZ projects. It should not be ruled out that agriculture is still the source of sustenance to the maximum number of Indian families.

At present, India’s total cultivable area is estimated to be about 173 million hectares. At the same time, an estimated 108 million hectares can be developed for nonagricultural uses, as they are either forested, or unsuited for agriculture.

State governments should ensure that fertile land is not notified for industrialisation projects, and that, these projects should only be limited to barren and waste land.

SEZs could also be used as a tool to address some problems such as insurgency. It is said that an idle mind is a devil’s workshop. We can realise that problems such as unrest exist only in areas which have not witnessed economic development.

The author is vice-chairman and managing director of JSW Steel and the president of Assocham

Investment + protection = Ulips

Asian — Mon, 01 Sep 2008 18:22:55 GMT

N.S. Kannan

Consumers today have a variety of investment instruments available in the market to suit their investment needs. One of the systematic, long-term investment option gaining popularity is the unit linked insurance plans (Ulips).

The introduction of Ulips has possibly been the single-largest innovation in the field of life insurance in the past several decades. Since then, Ulips have emerged as a strong customer proposition due to its key features of liquidity, flexibility and transparency.

These benefits are possible because Ulips are differently structured products and leave many choices to the policyholder. Put simply, Ulips are structured such that the protection (insurance) element and the savings element can be distinguished and hence managed according to one’s specific needs, offering unprecedented flexibility and transparency. Ulips are a category of financial solutions that combine financial protection with market-led investment returns.

Flexibility and transparency are the two key features of the product. Ulips also provide customers the freedom to switch between funds at no extra cost as against other market linked investments in which the customer bears the entry load (and even exit loads in some cases) for moving into a debt or equity fund from the other.

Ulips also provide flexibility to decrease or increase protection over the term of the plan, as the protection needs of an average customer changes over his/her lifespan. Further, Ulips offer the flexibility to add health insurance coverage by adding critical illness riders. Most Ulips also offer customisation whereby the customer can enhance or reduce or even totally drop such additional insurance covers during the term of the product.

Flexibility in premium payment is another benefit provided by Ulips. Most Ulips provide options to increase or reduce premiums after three years. While discontinuing premium payment is not conducive to long-term wealth generation, Ulips, with their low or nil surrender charges, are customer-friendly and allow withdrawal of fund value in emergencies. Ulips also provide an option to ‘enhance’ the kitty using top-ups that add to the existing fund value.

Doing a cost-return comparison between Ulips on the one hand, and other market-linked saving instruments and separate financial protection instruments on the other hand, Ulips indicate a better performance than such instruments over a long term period. The Ulip charge structure is comparable and at times, even competitive to other market-linked products over a term of over eight years.

Increasing popularity

With the entry of private companies in the life insurance sector, consumers started to experience unique products and services that met their needs beyond life insurance.

Indian consumers are now more market-savvy and understand the underlying potential in market linked investments. They have also realised that equities have the potential to provide maximum returns over the long-term and now look at life insurance as a viable route towards investing in markets.

Buying a Ulip is quite different from buying a traditional insurance product. All financial products have a certain amount of risk and charges. It would be unrealistic to assume that the features and benefits of a Ulip come at no cost, though the charges are considerably lower than that of a traditional product. In fact, the very reason the product is transparent is because the customer knows the charges and risks. One must know that it is their right and responsibility to ask a company for printed benefit illustration and brochure, and take some time to read, understand and question it, to enable them reap maximum benefits.

Investments in Ulips should be in tune with the individual’s risk appetite. Individuals who have a propensity to take risks should invest in Ulips with a higher equity component.

N.S. Kannan is executive director, ICICI Prudential Life Insurance Co. Ltd.

Mutual Funds edge out Fixed Deposits

Asian — Mon, 01 Sep 2008 18:21:27 GMT

Arindam Ghosh

Every individual faces the dilemma of how to make their hard earned money grow. Historically, India has been one of the high saving nations in the world with as over 35 per cent of income is kept idling in savings accounts or time deposits.

As per the latest Max New York Life Insurance- NCAER India Financial Protection Survey, 2007, the total household savings stood at $190 billion out of which close to $100 billion is parked in banks (time deposits and savings accounts) and earns an interest rate between three per cent and nine per cent. This is not surprising considering that out of the 32.1 crore paid workforce in India, over 20 crore people still rest their faith in traditional investments like fixed deposits, postal deposits, government bonds, national savings certificates, chit funds, etc.

However, is investing in traditional instruments really the right thing to do? There are a host of disadvantages when it comes to investing in fixed deposits, The interest earned on a fixed deposit is not tax free; since the interest gets added to the individual’s income for the given year and is taxed according to the tax bracket that the depositor falls into.

For those falling in the top tax bracket, the interest earned from a fixed deposit is taxed at the rate of 33.99 per cent. Redeeming a fixed deposit before its maturity date is again unrewarding. Premature withdrawal of a fixed deposit has a cost attached to it. Most banks, in such cases, deduct an interest of 0.5 per cent for early withdrawal.

Due to urgent need of money, the depositor has to break the deposit at the end of one year, the bank will pay an interest of 8.5 per cent corresponding to deposit rates for one year. In this case, the individual will be paid an interest of 0.5 per cent less than 8.5 per cent which is eight per cent.

Today, investors realise the importance of making their money grow in a prudent manner. Many have embarked onto smarter and tax efficient investments like mutual funds which are an attractive means to invest your savings. When you invest in a mutual fund, your money is pooled along with the money of other investors and is used to buy securities like stocks, bonds, and other financial instruments. These are run by investment professionals who decide with expertise in managing investments and are governed by the Securities Exchange Board of India which is one of the most stringent authorities in India.

Today, over 5.3 million investors in India invest in different types of mutual funds given their distinct advantages one of which is that they are more tax efficient. Private sector mutual funds have been around for more than 15 years now and in some countries like the United States, mutual fund investments are in fact bigger than bank deposits.

To give you a better insight to the tax benefit, let’s assume an individual wants to invest Rs 10,000 for five years at a compounded interest rate of nine per cent in a fixed deposit as compared to the same investment terms in a equity oriented scheme of a mutual fund.

Investing Rs 1 lakh in a mutual fund helps the individual make additional returns of Rs 1,830.78 compared to the fixed deposits of banks.

Assumed rate

Even if one were to look at investing for period less than one year say nine months, returns from a mutual fund are taxed at 15 per cent (short term capital gains tax) which is much lower to the 33.99 per cent (considering highest tax bracket) that one may have to pay for a similar investment in a fixed deposit of a bank.

While mutual funds score on the tax efficiency front, another factor for one to invest in such instruments is inflation.

We all know that inflation affects our standard of living and our ability to purchase goods. Inflation in its true sense results in decline in purchasing power of money.

Today inflation is hovering at 12.44 per cent which means that the value of Rs 100 note has depreciated to Rs 87.66. Given this scenario one must look at an investment which gives you a return of at least 12.5 per cent so that the post-inflation returns are positive. Sadly, bank fixed deposits offer a return of only nine per cent or 10 per cent which is much lower than inflation.

If one were to add the tax liability to fixed deposit returns it would fall below eight per cent. Given the distinct advantages that mutual funds offer over Fixed deposits, they are sure to command a significant portion of the investment wallet in the times to come!

Arindam Ghosh is the chief executive officer of Mirae Asset Global Investment Management (India) Ltd.

In search of Divine Help

Asian — Mon, 18 Aug 2008 17:07:05 GMT

Yogesh Mehendale

Last week, Mr Ratan Tata, chairman of the Tata Group, visited the famous hill shrine of Lord Venkateshwara at Tirumala near Tirupati.

He was accompanied by Mr Krishna Kumar, chairman of Tata Tea, and they participated in the pre-dawn rituals conducted at the shrine. They were at the temple for about 30 minutes. Sources say that Mr Tata regularly visits Tirupati along with Mr Krishna Kumar.

Mr Tata is just one among many big businessmen of the country who frequent temples for solace and for strength.

"They seek out their own way to peace," says Mr Bikhubhai Chauhan, a well-known astrologer consulted by several businessmen. "They seek guidance and advice for good dates or good mantras," he says.

Most of them also pray at favourite temples on the eve of major business ventures or mergers. Business is not just about economics in a religion-soaked country such as India. And Tirupati stands out as one of the biggest pilgrimage centres for businessmen.

Mr Anil Ambani, the chairman of the Anil Dhirubhai Ambani group, is another frequent temple visitor. Sources close to him say that he makes at least two visits to Tirupati every year. Prior to 2002, when his father was still alive, Mr Ambani had performed the parikrama at Kailash Mansarovar. It's a three-day trek and he had done the gruelling rounds on foot while many others do it on horseback or are carried.

Mr Ambani also undertakes the Amarnath yatra regularly as a devotee of Lord Shiva. He often visits the Nathdwara Temple with his mother.

Before the split of the Re-liance group, he had made a flurry of visits to famous temples across the country.

Similarly, his friend and superstar-businessman, Mr Amitabh Bachchan, became the devotee of the famous Siddhivinayak temple in Prabhadevi in Mumbai after his business ventures ran into trouble.

After he started going to the temple, Bachchan was able to revive his fortunes through Kaun Banega Crorepati. He still walks barefooted from his home at Juhu to the temple. Now his family members, including son Abhishek and daughter-in-law Aishwarya, often join him for this ritual.

"It is a common practice among businesspeople to conduct pujas at particular temples on every important occasion," said a famous priest. "Sometimes there would be 20-25 purohits performing rituals," he added. A leading businessman of yesteryear, Satyanarayan Goenka, had fallen very ill when he was on a business trip at Brahmadesh. He then came into contact with a guru who teaches the Vipassana meditation technique.

It gave him relief from his disease and so he started this school of Vipassana meditation in Maharashtra free of charge.

Mr Goenka recalled how another businessman had approached him saying that his partner was trying to grab the whole business. The veteran advised him to practice Vipassana.

"After a while, this helpless businessman became the sole proprietor and he bought out his worrisome partner," said Mr Goenka. "He is now a successful businessman and also a de-stressed person," he added.

Businesspeople are also heavily tuned to Vastu. Mr Murali Krishnan, a Mumbai-based Vastu consultant, said he had helped many a company make a turnaround. One IT firm located at Vashi was facing huge problems in the area of order booking, employee performance and profitability. Day by day the orders were going down and good staffers were leaving. The growth graph started declining and eventually it entered the negative terrain.

Then Mr Krishnan was called in. After a thorough investigation, Mr Krishnan asked the directors to vacate the area in the northeast direction, where unwanted material was dumped.

Toilets were also located nearby and Mr Krishnan asked them to shift the toilets and empty the space.

The management did so and soon the ambience changed from negative to positive. "Within a month, the company experienced a positive response on all the fronts and now it is making good profits," he said.

Another loss-making firm in Mulund was also reportedly salvaged by Mr Krishnan. The firm had placed its heavy machinery in the no-rtheast direction, the director's cabin was in the wrong place and most importantly, the entrance was not in a proper direction.

"This kind of interior creates turmoil in the long term," said Mr Krishnan. "I advised them to shift the heavy machinery towards Southwest and create an entrance according to Vastushastra. Within a few months company saw a turnaround," he added.

He claimed that at least six companies in the same belt were facing a similar crisis, but all have become better after they changed their interior arrangements suited to Vastushastra.

Another Vastu consultant said that the executives of Microsoft Corporation usually took the prasad of a Hanuman temple at Srirangam in south India for Mr Bill Gates. He also claimed that Mr Gates had built his home according ro Vastushastra.

It is believed that Vastupurush will shower prosperity if pleased. No wonder then businessmen go the extra mile to keep the spirit in good cheer.