Plastic smiles
We have the world’s worst!

Environmental policy is oft en drawn in isolation, owing to the derisory participation of the victims. This is getting worse today, as millions of poor and victimized people are actually the major sufferers of environmental risks. The business of plastic callously passes the waste and residue after production, to the poorest in the land. Moreover, thousands of little hands are involved in collecting this hazardous waste and dumping it to proper allocated places. When we descend the economic ladder, the situation gets worse, as increase in the number of landfills and waste dumps cause a more than significant increase in diseases. For example, these activities give rise to intestinal parasite infection (92% incidence in Kolkata alone), abnormal pulmonary infection (among 23% dump-site workers) and also blood-borne infections. Even the not so distant decision of courts to relocate factories outside the realms of cities ultimately ended up degrading the countryside and arable land of rural folk, generally belonging to the lower economic cadre. Are environmental policies expected to border on nepotism by favouring the betterment of urban and upper income societies at the cost of the health of rural and lower income societies? Guess who in your house can afford bottled water. You, or your maid?

Tribal tribulations
Who takes the blame for this?

Tribals in India have been badly hurt rather than being helped by India’s pursuits of development. The suffering of almost 80 million tribals in India has increased with the increase in large industrial, mining and irrigation projects, leading to massive deforestation and displacement. The fast depletion of forests due to industrialisation and SEZs has affected the life of around 533 tribes.

The annual rate of depletion of vegetation is estimated to be around 1.5 sq. kms per year. The proliferation of stone quarries and stone crushers in India’s continuing quest to exploit its natural resources to the maximum has ensured that entire landscapes, erstwhile populated by various tribes, have regularly been converted into vast areas full of pits, where nothing can be produced and cultivated. Worse, the winds carrying stone dust from these machines, apart from causing cancer and other fatal lung diseases, pollutes the air, reduces the fertility of the soil and collectively gives rise to large-scale soil erosion, effectively hitting the tribals where it hurts the hardest. Who takes the blame for such tribal tribulations? It’s the butler, stupid! The government, of course!

Ganda Jal!
How could we miss out on this?

Pollution is a vexing problem in India, and when it is about rivers and water bodies, the problem gets deeply intensify ed. On an average, 90% to 95% of domestic sewage and around 70% of all industrial waste are discharged into waters, and the same later gets mixed with the water table and ends up entering major rivers fl owing across the country. Not only industrial units, but agriculture also is a contributor to river pollution. Fertilisers, pesticides and chemicals have contaminated surface water and water sources heavily. All of India’s 14 major rivers are shoddily polluted. Almost 50 million cubic metres of untreated sewage and 20 million litres of industrial waste get deposited at the coastal lines of India annually. Astonishingly, Yamuna is fed with 200 million litres of raw sewage and 20 millions litres of industrial waste daily, while the distributaries from river Cauvery, which serve millions of southern Indian homes, have already taken a blackish hue. Worshipping and desecration of rivers clearly go hand in hand in India. While millions of Indians might religiously want to take their last breath by the banks of sacred Ganga, one wonders how many would be ready to take a bath in it every day!

Why Suzlon is turned on
Many say that the REpower acquisition by Suzlon signals a meteoric high for promoter Chairman Tulsi Tanti. Will he crash or fly higher?

“The answer my friend, is blowing in the wind, the answer is...” That was poet and rock phenomenon, Bob Dylan, about 50 years ago. Having completed 50 years, the multi-billionaire Tulsi Tanti has neither the time nor the inclination to go nostalgic about Dylan. But for sure, he and his brainchild, Suzlon, have turned the meaning of ‘blowing in the wind’ on its head.

His neighbours hardly ever get to see him. They are typical upper middle-class professionals, who are realising their own versions of the Great Indian Dream. But they can’t help talking about Tulsi Tanti, who stays in a rented apartment in this upscale locality of Pune. Tanti’s brothers stay in similarly modest adjoining apartments and the family has dinner together. Tulsi Tanti is missing most of the time because he is inside an aircraft for about 200 days in a year. Of late, neighbours talk more oft en about the modest lifestyle of Tanti, who is worth about $5 billion at the moment; particularly after a high-profile builder from Pune called Abhay Bhonsle was arrested recently by tax authorities for evading duty. Bhonsle stays in a 56-bedroom mansion in a tony Pune suburb. About 200 kilometres away in Dalal Street, nobody is interested in where Tanti and his family stay.

Yet, the bulls and bears on the street talk as much about Tanti as his neighbours in Pune do. And why not? On May 24, 2007, when Suzlon announced the acquisition of REpower, the German wind turbine company in a $1.33 billion deal, the scrip was hovering around Rs.1150 on the floor. Within a week, the share price had zoomed to hover around Rs.1300. Clearly, Tanti is the latest darling of the bulls in Dalal Street. Tanti explains why the REpower acquisition has lit up so many fires in the market, “Integration with REpower will push Suzlon to the fourth-third spot globally by 2008. It will push our revenues from Europe to over 50%. We have been acquiring fast to expand and will continue to look for opportunities.” Europe is the largest market for wind energy and Suzlon now becomes the fourth ranked wind energy and turbine company in the world.

The rise and rise of Tanti and Suzlon appears too good to be true. In 2003-04, revenue was a mere Rs.3.3 billion and the company clocked net profits of Rs.650 million, and not many had heard of either Suzlon or chairman Tulsi Tanti. By 2006- 07, revenue has catapulted through the roof to Rs.60 odd billion and net profits have soared to Rs.10 billion – a jump of about 1700%! What’s more, Suzlon is just about 11 years old and did not even exist when Enron was negotiating with the government of Maharashtra over the controversial power project, back in 1994. Most equity analysts and Dalal Street punters agree that the astonishing ascendancy of Suzlon can be categorised as meteoric by any yard- stick. From relatively humble beginnings in Rajkot, Gujarat, to a place in the Forbes list of billionaires in just about two decades, sounds almost like an Ambanistyle fairy tale. More so, when the man has entered an industry that is esoteric.

But then, meteoric rises sometimes do result in equally spectacular downfalls. Is there a possibility of that happening to Suzlon and Tanti? The chairman of Suzlon doesn’t even deign to talk about such speculation. He is single-mindedly focused on reaping the windfall from the windmills. According to him, the global market for wind energy is growing at about 20% every year. For the next decade or so, he plans for Suzlon to grow at least 30% a year and try damn hard to break into the top three in the global arena. He is equally bullish on the prospects for wind energy in India. His message for those who are sceptical is, “There is a potential to generate 45,000 MW of electricity through wind energy and not even 5% of that has been harnessed as yet.” Tanti is also betting that the era of cheap and plentiful oil is well and truly over and that the entire world will follow Europe’s lead and concentrate on cleaner alternative sources of energy. And the latest trends in the global oil industry seem to definitely suggest that the days of oil at $40 or less per barrel are gone for good.

According to many analysts who have been tracking India Inc. for a decade or more, the rise of Tanti and Suzlon might well be meteoric. But they insist it is not a fl ash in the pan; nor is it a new world beating strategy for sustained growth that Tanti has suddenly discovered. Tanti has followed the same strategy adopted by many aggressive Indian entrepreneurs in the last 15 years or so. The strategy is simple: Seize an unfolding opportunity with both hands, get hold of global partners and expand furiously, without bothering about profits initially. Subhash Chandra of Zee adopted the same strategy to become the media and entertainment czar of India. Sunil Mittal of Bharti adopted the same strategy to emerge as the telecom czar. Initiated by the late Dr. Parvinder Singh, Ranbaxy adopted a similar ‘generics’ driven global strategy to become India’s number one pharma company. And GVK and GMR groups are now doing the same with infrastructure projects. Incidentally, most of the names mentioned above are true first generation entrepreneurs and all of them belong to the Forbes list of billionaires!

So has Tanti built an empire that is already invincible? Hardly so. There are two key areas in which Suzlon could be strategically vulnerable in the long-run. The first one relates to the bewildering speed with which technology for alternative sources of energy is changing. At the moment, Suzlon has got a lock on wind energy by occupying every segment across the value chain, from manufacturing turbines to generating and distributing electricity. Yet, like Google threatening the very existence of Microsoft in the long-run, there is simply no predicting where Suzlon will find itself on the technology curve.

The second strategic threat is more potent. To promote alternative sources of energy, the government of India has offered huge tax incentives to individuals and companies investing in wind energy projects. Governments in Maharashtra and Tamil Nadu have offered even more goodies; to the point where even a film star like Aishwarya Rai has invested in windmills for legitimate tax breaks. Like all good things, this too will come to an end. That is when Tulsi Tanti will find it even more formidable to sustain growth and profitability. Many sceptics think that Tanti might well stumble when the tax holidays are over.

But then, remember he is the new-age Indian entrepreneur who sees opportunities in every threat. Who knows, if his windmills no longer generate windfalls, Tanti might visualize his vast wind farms as lucrative real estate that needs to be exploited?!

Tax Holidys !

If you have a few million rupees to spare and want to avoid the tax man, buying a wind mill might be a good idea. The craze for alternative sources of energy has ensured that a businessman can generate electricity in a wind farm and pay absolutely zilch as income or corporate tax. This has led to many controversies and run ins with the tax man. Even Suzlon has been paid a visit or two by income tax sleuths. The Chennaibased Kemkas and the NEPC group they manage, was notorious during the 1990s for perceived abuse of liberal tax laws to create ‘mythical’ wind mills. Wind farms were also associated with the bitter controversy involving Tata Finance, when the erstwhile close aide of Ratan Tata, Dilip Pendse was accused of fraud.