Hotel chains, both global and Indian, are increasingly opting for management contracts rather than to invest in properties in the country due to factors such as high cost of funds and project delays.While global chains, such as the UK's InterContinental, Accor of France and Dubai-based Rotana Hotels, will open most of their new properties under management contracts, Indian chains such as The Leela Group and Lemon Tree Hotels, too, are now adopting an asset light-asset right model. Experts say an asset-light strategy helps faster expansion and higher efficiency. Also, it is a win-win for reputed international hotel chains.

Some investors believe that the ‘Big India consumption story’ is well understood and well discounted in stock valuations. In this report, we address a few oft-repeated myths about the Indian consumer:(i) How much penetration-led opportunity is really there? (ii) Is uptrading possible in all categories? (iii) Does size advantage really exist? (iv) Is distribution growth unlimited? (v) How widely is it understood that 10-25% of profits of many consumer companies come from ‘other income’ (see this in conjunction with the high valuations)? (vi) Is it really correct to compare India with other emerging markets/countries? (vii) India is an attractive market for multinational companies; however, it appears to be less so for domestic consumer companies. (viii) Most consumer companies have either single-product or single-category exposure. (ix) Can processed foods ever be big in India? (x) Are Indian consumers brand–conscious (enough)?

Along with growing in sophistication, India's business process outsourcing industry is expanding at a rapid clip, a sharp contrast to the information technology services sector which has struggled to recover after the global financial crisis of 2008. The faster growth is driven by cost pressures at large corporations in Europe and the United States which are now outsourcing entire processes rather than parts of processes they used to earlier. Such a development, while helping reduce costs, also calls for advanced skills and expertise at Indian BPO firms.

Finance Minister P Chidambaram has asked banks to lend a helping hand to builders, particularly those involved in construction of residential properties, in order to revive faltering economic growth. The minister discussed the problems of the real estate sector with the chiefs of state-run commercial banks at a meeting last week in New Delhi. Bankers who attended the meeting described the broad thrust of Chidambaram's comments, but declined to speak on record.

The Central Electricity Regulatory Commission has fixed the normative cost of solar photo voltaic plants as Rs 8 crore per MW of installed capacity, for the year 2013-14. The CERC’s normative cost is generally taken as the benchmark by developers and often forms the basis for tariff negotiations. For instance, in the forthcoming meeting of the would-be investors in Tamil Nadu and the state’s electricity generation and distribution utility, TANGEDCO, which is scheduled for November 23, the CERC norm can be expected to be taken as the reference cost of solar plants.

Dwindling admissions and the subsequent fall in cash inflow through fees has not just pulled down the creditworthiness of education institutes but also made banks more wary of lending to these. Banks say, given this situation, they are not increasing their exposure to education institutions. For instance, a senior official from Indian Overseas Bank said: “With the problems evident, our bank is not growing loan exposure to education institutions. Though our educational loan portfolio is limited, we are exercising caution.”

International Finance Corporation (IFC) is likely to take an equity stake for an undisclosed amount in Value & Budget Housing Corporation (VBHC). This company is a low-cost housing venture promoted by Jaithirth (Jerry) Rao , founder of Mphasis, which was sold to the US-based EDS. VBHC has projects under various stages of development and construction across Bangalore , Chennai and Mumbai. It is also identifying and procuring land for developing affordable housing in Rajasthan, Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh.

Power producers could see an 8-21 per cent increase in coal price if the revised mechanism for price pooling is implemented. It is yet to be seen if all stakeholders agree to the contentious issue of price-pooling. Coal India and Central Electricity Authority (CEA) have worked out a new scheme of price pooling. According to this, the differential between higher price of imported coal and indigenous coal is to be spread over the entire domestic coal grades. Simply put, while the end consumer will pay single price, the power producers will have to bear the burden of differential between imported and indigenously produced coal.

Aimed at augmenting housing development in the State, Punjab Government has asked the Confederation of Real Estate Developers Association (Credai) to invest in real estate projects. Wooing developers with sops such as easy project approvals and land title clearances, Punjab Deputy Chief Minister Sukhbir Singh Badal told reporters that the demand for housing in Punjab will pick pace with infrastructure developments.

International multi-brand retail chains have all pushed their India plans to 2013, at least until after Christmas and New Year holidays, it is learnt. The September euphoria, after the Cabinet cleared up to 51 per cent FDI (foreign direct investment) in multi-brand retail, is giving way to doubt. Foreign players are expected to take critical business decisions only next year, industry sources say. The Opposition call for a discussion and perhaps voting in Parliament on the issue of retail FDI has made international companies cagey about their plans, analysts say. That includes companies present in India across other retail formats and those weighing the option of entering the country. The fact that the world's largest retail chain, Walmart, has admitted inquiries or investigations into corrupt practices in many countries including India has complicated matters for the sector. In a separate development, the Enforcement Directorate is investigating an investment by the US chain in Bharti group to scrutinise alleged Foreign Exchange Management Act (Fema) violations.

The information technology industry’s survival instinct is its biggest driving force. When the Government decided to put an end to the sunset clause, most thought it would be very difficult for the IT industry to absorb. True, it was. But the industry has quickly devised methods to reduce effective tax rates. And the immediate focus for small and big firms is to increase presence in the special economic zones (SEZs). Engineering services firm Infotech has found that for every 300 associates it deploys in SEZs, it could get a tax reduction of one per cent. In the first half of this fiscal, its effective tax rate came down by 2 per cent on this count. In the first half, it paid tax of Rs 52 crore.

Just when it looked like diesel had won the 'king of fuel' crown, its more expensive counterpart is beginning to claw back some lost ground. Although demand for diesel is still strong and accounted for 57% of total car sales till September end, there has been a 3% to 5% jump in sales of petrol cars in October, taking its overall tally to 46%-48%.

The government has decided to offer discount on coal blocks' prices being offered to power companies in the auction set to begin in a few months, coal secretary S K Srivastava said. The coal ministry is, however, yet to decide the rate at which discount will be offered and is holding consultations with state governments that will get the entire auction money. Srivastava said the decision has been taken to ensure low electricity tariffs and all stakeholders including state governments have agreed to it. "It has been decided to give a discount to power sector companies as otherwise the auction will result in higher electricity tariffs," he said. "The question is how much discount should be offered. The state governments have also been involved in the exercise since there should be a balance between state revenues and power tariffs."

In a major boost for wind power energy generation, the Andhra Pradesh Electricity Regulatory Commission has fixed Rs 4.70 per unit tariff for 25 years for firms which sign up power purchase agreements by March 31, 2015. Earlier, the wind power tariff in the State was Rs 3.50/unit. The issue of tariff was proving to be major hurdle for wind power producers. Developers expressed concern that the earlier tariff was unremunerative as it was not bankable. Several leading players in the country had signed up to set up new plants but were unable to do so due to lower tariff structure. Generating companies will have to bear the expenses to evacuate power generated to the grid sub-station.

With the easing of raw material prices, including that of steel, the margins of automakers, including Maruti, may improve in the second half of 2012-13. Experts say the cooling down of input costs will bring respite to the domestic car makers at a time when their profitability is under considerable pressure from the heavy discounting undertaken to push the sales in a slow market. Car market leader Maruti Suzuki expects to negotiate 5-6% lower prices with both domestic and global steel suppliers under a new six-month price contract applicable retrospectively from September, 2012 and going up to March, 2013. The new contract is expected to be signed this December. Maruti currently pays about R46-47 for a kg of steel on average under half-yearly contracts.

The Cabinet today approved levy of a one-time fee on GSM operators with more than 4.4 Mhz spectrum. But a decision to impose the fee on CDMA players has been put off. That’s because the levy was supposed to be calculated on the final bid price in the upcoming auction. Since there are no bidders for CDMA spectrum, the Government does not have a base to calculate the one-time fee. Communications and IT Minister Kapil Sibal said that while CDMA players with over 2.5 Mhz spectrum will have to pay the one-time fee, the pricing mechanism will be determined separately by the Department of Telecom. The proposal will be brought back to the Cabinet after the DoT takes a view. The Government expected to get about Rs 6,000 crore from CDMA operators.

Just four days before the much awaited 2G spectrum auction, the Cabinet on Thursday cleared a proposal to impose a one-time charge on incumbent GSM operators’ spectrum beyond 4.4 MHz. It deferred a decision on imposing a one-time fee on spectrum beyond 2.5 MHz with CDMA players, because its pricing could not be determined by the coming 2G auction. That is because there are no bidders for this band in the auction, with both Videocon and Tata Teleservices having pulled out.

India is among the top three fastest growing Internet markets in the world, a study by industry body Assocham and ComScore has said. "Among the Bric nations, India has been the fastest growing market adding over 18 million Internet users and growing at an annual rate of 41 per cent," the study said. The Internet user base in the country is approximately 125 million, the study added. "China added over 14 million users to reach 336 million Internet users by the end of July 2012. Russia and India show similar trends in online usage patterns along with similarities in e-commerce and payment types," it said

After a long time, the crunch-hit real estate sector is experiencing top-level churn. The managing directors of at least two companies, Indiabulls Real Estate and Peninsula Land, quit recently. So did the real estate heads of two property funds, Indiareit and Everstone Capital. They are either moving to other realty companies, starting their own ventures or shifting streams to join consultancies.

Bloomberg News recently reported that Infosys lowered its forecast for this fiscal year’s revenue to Rs 39,580 crore from a July estimate of Rs 40,360 crore — a whopping reduction of Rs 780 crore. It quoted Infosys CEO S.D. Shibulal as saying that the “business environment continues to be challenging.” Critics have charged that the problems of Infosys are local to it and that clear differentiation has allowed competitors such as TCS and HCL to do better. But Shibulal may have been talking about an environment that is becoming increasingly difficult for all the Indian majors to operate in, not just Infosys. If promise of growth is what drives market performance, the coming years are likely to be a rough ride. The reasons are as follows.